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AOL to sell over 800 patents to Microsoft

by Mark Tyson on 9 April 2012, 18:02

Tags: AOL (NYSE:AOL), Microsoft (NASDAQ:MSFT)

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AOL shares hit a year high today, after it confirmed agreements to sell 800 of its patents to Microsoft Corp. The cost to Microsoft is about $1.06 billion; about £630 million today, depending on which Bureau de Change you call for a quote. The deal comes following news, only a few weeks ago, that a major shareholder asked AOL to pull their finger out with regards to making money from their patents. Recently patent battles, suing and counter suing has been in the news a lot; Apple, Microsoft, Google, Samsung - they’ve all been at it.

AOL said it will return a significant portion of the proceeds from the sale to shareholders. The shares are currently up more than 43 per cent at $26.67. The deal is worth $15 per share to AOL, yet AOL shares were trading for only $18 on Friday. (so last week you could have bought the whole company for $18 per share, theoretically) Microsoft also gets a non-exclusive license to AOL’s 300ish other patents, which aren’t being sold. The patents Microsoft has gained will include some of the first ever patents dealing with social networking. Facebook will benefit, as a Microsoft partner, from some protection against future possible patent attacks in the social networking area.


AOL's new logo


The deal should be sealed by the end of 2012 and, if it decides to terminate the deal, Microsoft would have to pay AOL a fee of over $200 million. Microsoft’s General Counsel and Executive Vice President, Legal and Corporate Affairs, Brad Smith, said: "This is a valuable portfolio that we have been following for years and analyzing in detail for several months." Indeed the patents could have also been very valuable to competitors such as Google, wanting to bolster its Google+ network and Yahoo who are seeking new direction with a new CEO.

AOL currently makes most of its money from dial-up internet access. The company acquired Netscape for $4.2 billion in 2008. They are also the company behind several popular internet sites such as The Huffington Post, TechCrunch, Joystiq and Engadget.

HEXUS Forums :: 4 Comments

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AOL currently makes most of its money from dial-up internet access.
Dial-up as in beeep-beep-squawk-squawk 56k-modem - do many people still use that?? :eek:
Dial-up as in beeep-beep-squawk-squawk 56k-modem - do many people still use that?? :eek:

I know a few people at uni with family holiday homes who use it, because they can pay by the minute rather than by the month. Having said that, I think 3G is killing that off slowly.

And I know a few places where broadband isn't an option due to proximity to an exchange, so unless you want satellite, dial-up is the only logical option.

As you say though, I can't imagine it's a big market. With broadband at £5 p/m on the right deal there's A) not much impetus to save money and get dial-up and B) not much of a profit margin.
They still exist? And, I'll never forgive them for buying Netscape and disposing it!
Yeah I used to use netecapeonline as a ISP but moved assoon as i hea\rd aol where going to have anything to do with it.