Microsoft grabs $1 billion’s worth of AOL patents

Lisa Morgan
April 10, 2012 —  (Page 2 of 2)
According to AOL, the acquired patents cover advertising, search, content generation and management, social networking, mapping, multimedia and streaming, and security.

A number of high-stakes players, including Amazon, eBay, Facebook and Google, participated in the auction. The patent rights purportedly span current and former AOL businesses, including Netscape, ICQ, MapQuest, CompuServe, and others.

The patent portfolio acquisition strengthens Microsoft’s competitive position in relation to Google and others, which includes generating licensing fees from new and perhaps existing licensees.

“Microsoft isn’t going to shell out $1 billion without doing a lot of investigating,” said Hyland. “There are a lot of different technologies involved here, which suggests Microsoft is looking at the acquisition as a complement to its current licensing program. With the AOL patents, there are more companies from which they can drive revenue.”

That’s consistent with what was said by Brad Smith, Microsoft’s general counsel and executive vice president of legal and corporate affairs.

"This is a valuable portfolio that we have been following for years and analyzing in detail for several months," he said. "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 AOL patents may also fuel additional revenue streams from existing licensees, depending on how its licensing agreements are written. If the licensing agreements are inclusive of portfolio licenses, then the new patents may be included, but if they are written more narrowly, Microsoft would be in a position to demand additional licensing fees from the likes of LG, Samsung and others, Hyland said.

The transaction is expected to be completed by the end of 2012, assuming there are no regulatory obstacles.

Related Search Term(s): AOL, Microsoft, patents

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04/11/2012 02:13:17 PM EST

Invest in Microsoft stocks. Its going to reach $40 in the next couple of years!

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