Yahoo! and Facebook say they’re now working together on a new advertising partnership and are also settling the ongoing patent dispute between the two companies. In the future we’re likely to see promotions across both Yahoo! and Facebook, along with deeper Facebook integration on the Yahoo! site.

Ross Levinsohn, interim CEO of Yahoo!, said “We are excited to develop a deeper partnership with Facebook, and I’m grateful to Sheryl [Sandberg, Chief Operating Officer at Facebook] and her team for working hard together with our team to develop this dynamic agreement. We are looking forward to building on the success we have already seen to provide innovative new products and experiences for both consumers and sponsors. Combining the premium content and reach of Yahoo! as the world’s leading digital media company with Facebook provides branded advertisers with unmatched opportunity.”

The two companies already had a partnership that allowed customers to share news and information from Yahoo! sites with Facebook friends.