AOL, Microsoft, & Facebook Close Billion-Dollar DealBy: Amanda Crum - June 17, 2012
AOL has just closed on a deal with Microsoft that will garner over a billion dollars for a large chunk of their patent portfolio.
The news comes at a time when AOL is desperately trying to make the most of their company, which has been pushed to the back burner by users in recent years. They say the deal will secure a higher value for shareholders, who will now be rolling in the dough as this deal benefits them directly. AOL has also been scaling down the company in mass layoffs in an attempt to increase their profit margin and pare down the cost of business.
Out of 1,100 AOL patents, Microsoft now owns 800, plus a license to 300 more; a duel-deal has been struck between Microsoft and Facebook, who will buy 650 of those social media-related patents for about $550 million. The partnership between Microsoft and Facebook is a big step in Microsoft’s move into IP licensing, which they’ve already begun doing to great success with Linux and Android. The move to social networking is the next logical step.
“Today’s agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction,” Microsoft’s Brad Smith said in April.
Aside from various social media inventions, the patents include security, advertising, search, mapping, and media streaming.