Facebook pays Microsoft $550 million for AOL patents

Mon Apr 23, 2012 4:58pm EDT
 
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By Alexei Oreskovic and Diane Bartz

SAN FRANCISCO/WASHINGTON (Reuters) - Facebook will pay Microsoft Corp $550 million for hundreds of patents that originated with AOL, beefing up its intellectual property arsenal.

The deal gives social network Facebook 650 patents and patent applications and license to another 275 patents and applications. It comes shortly before Facebook is expected to have the largest initial public offering in Silicon Valley history.

Patents have become a top priority for technology companies as many of them, including Google Inc and Apple Inc, become embroiled in patent-related lawsuits.

The patents, which Microsoft bought this year from AOL, cover a broad spectrum of technology, including mobile services, cell phone handsets, advertising and e-commerce, a source familiar with the situation said.

Microsoft trumped Amazon, eBay and other tech companies this month with its more than $1 billion purchase of most of AOL's patent trove. Valuing patents is a complex process, and it was not immediately clear whether Microsoft profited from the deal with Facebook.

Brad Smith, Microsoft's general counsel, said in a statement on Monday that the Facebook deal allows it "to recoup over half of our costs while achieving our goals from the AOL auction."

Facebook was also a participant in the AOL auction, a source said at the time.

The auction included technology rights from AOL's current and former businesses, ranging from Web browser Netscape and instant messaging service ICQ to MapQuest and early online service CompuServe, the source said on condition of anonymity because the information was not public.   Continued...

 
The interior of a Microsoft retail store is seen in San Diego January 18, 2012. REUTERS/Mike Blake