Microsoft has bolstered its artillery for the ongoing patent wars. Again.
On Monday, AOL announced that it would sell over 800 patents to Microsoft and grant Redmond a non-exclusive license to 300 more, all for a price of $1.056 billion in cash. "This is a valuable portfolio that we have been following for years and analyzing in detail for several months," read a statement from Microsoft general counsel, Brad Smith, who also noted that AOL ran a "competitive auction" for the patents.
AOL said the patent span "core and strategic technologies, including advertising, search, content generation/management, social networking, mapping, multimedia/streaming, and security among others." Presumably, some of the patents related to the Netscape browser, which AOL now owns.
Microsoft is just one of many big-name web companies that have sought to beef up their patent portfolios in recent years, as they jockey for position in the mobile market and other fast-moving industries. Last year, Microsoft was part of a consortium that purchased more than 6,000 patents from bankrupt Canadian telecommunication giant Nortel for $4.5 billion, joining forces with the likes of Apple, Research in Motion, Sony, Ericsson and EMC and keeping this massive patent prize from falling into the hands of arch rival Google.
All the while, Microsoft has used its patents to extract licensing fees from companies using Google's Android operating system, its browser-based Chrome OS, and other Linux-based OSes. During a hundred-day stretch in 2011, the company inked licensing deals with six different companies, including Acer, Viewsonic, HTC, Wistron, Onkyo, and Samsung.
In some cases, it has actually filed suit against companies for patent infringement, including Barnes & Noble, maker of the Nook e-book reader; GPS navigator outfit TomTom, and Android device maker Motorola Mobility, now a subsidiary of Google.
For AOL, the announcement of the Microsoft pact boosted its stock price on Wall Street. On Friday, its share prices closed at $18.40, and at 1 p.m. EDT on Monday, it was trading at $26.06, a 41 percent jump. The company's stock price hasn't been this high since 2009. AOL said it would return a "significant portion" of the proceeds of the sale to its shareholders.
Pending regulatory approval, the transaction is expected to finish at the end of 2012.
