SAN FRANCISCO — Facebook and Yahoo have agreed to settle a patent dispute, averting a potentially lengthy battle over the technology running two of the Internet's most popular destinations.

In dropping the lawsuits, the companies agreed Friday to license their patents to each other. They are also agreeing to an advertising alliance that expands their existing partnership.

AP Photo/Paul Sakuma

This combination of 2012 file

photos shows the logos of Yahoo, left, and Facebook, outside their offices in Santa Clara, Calif. and Menlo Park, Calif. The two companies have agreed to se...