Yahoo is in pretty dire straights as a business but still has a lot of employees on hand, so I guess leveling this lawsuit alleging that all social networks everywhere (but particularly Facebook) violate their patented social networking "technology" is a smart move:
Facebook's entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo!'s patented social networking technology.
I think I'm going to decide that I hope Facebook refuses to settle this suit and then somehow Yahoo ends up winning, letting them turn around and sue Google and every other proprietor of a system that "allows users to create profiles" and "connect with ... persons and businesses" on the planet. It seems to me that a totally absurd result of that scale might be what it takes to get patent reform rolling in a serious way.
On the legal merits, it seems to me that this basic social networking "technology" was part of early dial-up ISPs such as Prodigy and CompuServe long before the modern era of social networking sites.