Heres the story: Yahoo are accusing xfire of stealing yahoo copywrited coding. They're basing this on the fact that someone who worked on yahoo messenger now works on xfire. Yahoo reckon that this person ripped off some of the code that detects what games users are playing from yahoo messenger. Xfire deny this and have offered to let yahoo review the code and "the offer of legal arbitration, whereby Xfire will accept any decision the arbitrator makes. " which i think means they sit down in a room and come to a compromise. Yahoo failed to respond to both offers.
The conspiracy theory: Yahoo started moves on buying rival allseeing eye from UDPsoft before xfire had any momentum to show it was a serious contender. (The way you pay for allseeing eye is a one off payment rather than a subscription, this was probably kept a condition during the transaction between yahoo and UDPsoft as nothings changed on my subscription.)
By the time the deal was finished, XFire had one million users. Now, who is gonna pay for a program when you can get it for free? So now yahoo have wasted loads of money on a program that will bring in no revenue. The only way they can make a profit is by shutting xfire down, forcing people use allseeing eye, which is pretty crap unless you pay for it.
Keep freeware alive
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