Facebook Pays Microsoft over $500 Million to Buy AOL Patents, Microsoft Maintains Licenses

Facebook Buy Patents From Aol MicrosoftFacebook acquires a wealth of patents while forking out millions of dollars to Microsoft.

Facebook gains over 600 AOL patents but, weirdly, pays Microsoft over $500 million

Facebook has gained 650 patents from AOl, but instead of pay AOL paid Microsoft. Specifically, $550 million. The news comes as Facebook’s Initial Public Offering is expecting to happen in May, and could potentially value the company at hundreds of billions of dollars.

The reason Facebook paid Microsoft, despite the patent originating from AOL, is because Microsoft bought them. A Reuters source said they cover a wide variety of areas in the technology industry.

Microsoft purchased AOL patents worth $1 billion, so Facebook has roughly acquired half of the patents. It’s not confirmed whether Microsoft has profited from the deal, but the company said the company has recouped roughly half of its costs from the initial purchase while achieving its goals from the initial AOL auction. Facebook was apparently part of that auction, so this purchase at least represents some success for the social network.

The auction cover AOL’s long-forgotten browser Netscape and its instant messaging service ICQ, among other services.

Not the first cross-company deal

Microsoft always intended to sell the patents, a source said, speaking to Reuters, while Microsoft still keeps a license to the patents despite selling the patents to Facebook. So really, it’s a win-win for Microsoft as they recoup half of the deal’s money while not losing the patents completely.

Facebook said the patent acquisition helped to protect the long-term interests of the business. The company isn’t unfamiliar to patents, having run-ins with Yahoo! who claims Facebook infringes 10 of the patents. Yahoo! says the deal changes nothing, and the company will continue to pursue Facebook.

The deal represents the largest point when the two companies have joined together. Facebook is the largest social network, and Microsoft is the world’s largest software company. Back in 2007 Microsoft invested $240 million into Facebook, which was a significant deal at the time. Facebook had been approached by Yahoo! for a buyout, which Zuckerberg declined.

Facebook also uses Bing in the site’s search results, but is rumoured to be developing on their own search technology. The search capabilities only search for results on Facebook, not the web.

Published: Wednesday, April 25th, 2012 Last Modified: June 27, 2014

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