Yahoo and Facebook settle patent dispute

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In addition to settling all of the competing patent claims, the companies agreed on Friday to cross license certain patents and integrate some advertisements. Facebook will also begin displaying some social tools on Yahoo sites, and Yahoo will offer media coverage of events for Facebook users.

A source familiar with the deal said no money changed hands.

According to AllThingsD, which first reported on the settlement, Yahoo interim CEO Ross Levinsohn began negotiating to settle the lawsuit almost as soon as he took over from ousted CEO Scott Thompson.

Thompson had spearheaded the patent war, saying it could result in a payoff of billions of dollars, the news site reported.