Facebook To Buy 650 AOL Patents From Microsoft

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Social network gets second chance to acquire portfolio in £310m deal

Facebook has announced a deal which will see it acquire 650 of the patents AOL sold to Microsoft earlier this month.

The social network was believed to be interested in acquiring the patents during the original sale, but its bid was rejected for being too low.

Sharing the burden

As part of the agreement, Microsoft will retain ownership of 275 of the 925 patents it acquired from AOL, as well as a license to those that Facebook has bought. Facebook will pay $500 million (£310m) for the patents and will also receive licenses for those that Microsoft has retained.

Microsoft bought the original portfolio for $1.1 billion (£700m), which comprises patents related to search, advertising and mobile and relate to a number of AOL’s current and former businesses such as Netscape, MapQuest, CompuServe and Advertising.com. Microsoft also received licenses for AOL’s 300 remaining patents.

“Today’s agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction,” said Brad Smith, executive vice president and general counsel, Microsoft. “As we said earlier this month, we had submitted the winning AOL bid in order to obtain a durable license to the full AOL portfolio and ownership of certain patents that complement our existing portfolio.”

Facebook, which acquired 750 patents from IBM to cover various software and networking technologies in March, is currently embroiled in a legal dispute with Yahoo over patents relating to privacy, messaging and advertising.

“This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook’s interests over the long term,” commented Ted Ullyot, general counsel for Facebook.

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