April 9, 2012
AOL Sells Over 800 Patents To Microsoft
The sale to Microsoft came after a "competitive auction process", according to a statement made by AOL.
The deal also provides Microsoft will licenses to over 300 additional patents and patent applications.
AOL CEO Tim Armstrong said the deal "unlocks current dollar value for our shareholders and enables AOL to continue to aggressively execute our strategy to create long-term shareholder value."
Microsoft general counsel Brad Smith said the company is getting "a valuable portfolio that we have been following for years and analyzing in detail for several months."
He said Microsoft was able to obtain a durable license to the AOL portfolio and also the ownership of certain patents that help "complement" the company's existing portfolio.
AOL said the deal 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 said it expects to return a large portion of the sale proceeds to shareholders, and will determine what the most efficient method to do so would be.
The company said the transaction is expected to be completed by the end of 2012, upon satisfaction of customary conditions and regulatory approvals.
"The agreement with Microsoft represents the culmination of a robust auction process for our patent portfolio," Armstrong said in a statement. "We continue to hold a valuable patent portfolio as highlighted by the license we entered into with Microsoft."
Last month, All Things Digital reported that Armstrong compared AOL's patents to "beachfront property."
The sale marks the end of speculation around what AOL was planning to do with its patents. Starboard Value, as well as other shareholders in AOL, have put pressure on the company to realize some of the value of the patents.
The portfolio sold to Microsoft involves patents relating to mobile and Internet messaging, as well as location-based services and personalized content delivery.
According to Envision IP, AOL owns 81 patents related browser technologies like automatic form population, cache optimization, multilingual browser support, RSS feed technology, and webpage rendering.
Envision IP also said AOL owns a "handful" of patents related to cookie tracking using a toolbar dating back to 2000.
"In summary, AOL´s patent portfolio includes numerous patents with priority dates from the mid-1990“²s to early 2000“²s," Envision IP wrote in a blog post. "Many of these patents relate to fundamental online communication technologies, stemming from AOL´s early dominance in the instant messaging and email markets.
"In addition, AOL has a large number of early patents related to cache optimization, webpage rendering, search engine technologies, and multimedia compression and transmission."
The majority of AOL's patents are related to online communication, while it holds the least amount of patents in the software code category.