Microsoft and AOL Patent Deal Worth $1.056 Billion

Written by John Ponio    Monday, 09 April 2012 14:43

AOL Logo

It's not often you hear about AOL recently. They used to be big with their dial-up internet service, but since dial-up got replaced by DSL and Cable, they've drifted from mainstream to just about no-stream. But here's a big thing from AOL: AOL and Microsoft have announced a patent deal worth $1.056 billion where Microsoft will buy over 800 patents and patent applications from AOL, as well as get the licenses to use other patents that AOL will retain.

It wasn't announced what exactly Microsoft bought, patent-wise, but the press release stated that "AOL will continue to hold a significant patent portfolio of over 300 patents and patent applications spanning core and strategic technologies, including advertising, search, content generation/management, social networking, mapping, multimedia/streaming, and security among others. AOL also received a license to the patents being sold to Microsoft." Brad Smith, who is the General Counsel and Vice President of Legal and Corporate Affairs at Microsoft, said about it,

"This is a valuable portfolio that we have been following for years and analyzing in detail for several months. AOL ran a competitive auction and by participating, Microsoft was able to achieve our two primary goals: obtaining a durable license to the full AOL portfolio and ownership of certain patents that complement our existing portfolio."

The deal has to go through standard anti-trust regulations and review, so the sale isn't expected to close until the end of the year. AOL plans to take the profit and give it to the shareholders, and will avoid taxes by writing off the stock sale (the whole deal includes the sale of this stock) of an AOL subsidiary as a loss. You can read the full press release here