UPDATE: AllThingsD's Swisher Says Yahoo! (YHOO), Facebook (FB) Have Expanded Ad, Content Deal

(Updated - July 6, 2012 2:36 PM EDT)

Shares of Yahoo! (Nasdaq: YHOO) bounced just after noon Friday as AllThingsD's Kara Swisher, recently thee source on all things Yahoo!, reported the company and Facebook (Nasdaq: FB) have entered into an agreement to expand their current ad and content partnership.

Swisher's sources said the deal is part of a final settlement related to patent infringement suits between the two. Yahoo! and Facebook will also likely cross-license several key patents.

Swisher said no cash payments will made by either Yahoo! or Facebook related to the settlement.

Following a spike to the session high at $15.91 just after the headline began crossing wires, Yahoo! shares are now off session highs. The stock last traded at $15.76, down 0.6 percent for the session.

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