Facebook Buys AOL Patents From Microsoft

NEW YORK (AP) — Microsoft, which just bought patents from AOL for $1 billion, is now turning around and selling most of them to Facebook for $550 million.

Facebook is buying about 650 of the 925 AOL patents and patent applications that Microsoft bought, Microsoft and Facebook said Monday.

Facebook will also get a license to use the rest of the AOL Inc. patents that Microsoft bought. Similarly, Microsoft Corp. will get a license to use the patents Facebook is buying. This part of the arrangement amounts to an agreement between Facebook and Microsoft not to sue each other over any of the AOL patents. The companies are not saying what the patents cover.

Microsoft said the deal enables it to recoup half the cost of the AOL deal while reaching its goals for the purchase. Facebook's general counsel, Ted Ullyot, called the move a "significant step in our ongoing process of building an intellectual property portfolio to protect Facebook's interests over the long term."

Patents have become a valuable commodity for technology companies in recent years, and companies frequently use them in lawsuits against one another.

Facebook, which is expected to go public in May, is embroiled in a patent suit with struggling Internet company Yahoo Inc. Yahoo had sued Facebook saying the company violates 10 of its patents covering advertising, privacy controls and social networking. Facebook responded with its own lawsuit this month accusing Yahoo of violating 10 of its patents.

The patents from AOL are adding to Facebook's quickly expanding patent portfolio. The company recently acquired 750 patents from IBM Corp. covering technologies that deal with software and networking. At the end of 2011, Facebook had just 56 U.S. patents, which was a relatively small number compared with other big tech companies.

Facebook has said it expects to raise $5 billion in its initial public offering. The actual figure is expected to be higher, however, and could value the Menlo Park, Calif.-based company at as much as $100 billion.

EDITOR'S NOTE:Aol is the parent company of The Huffington Post. Have a look through the slideshow (below) to see some of the biggest risks looming over Facebook as it approaches its IPO.

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Comments

[Flight]

01:48 PM on 04/24/2012

Z- berg is all about buying things now, but take a look at what his company stands for:

http://www.wcnc.com/news/local/Facebook-forces-photos-of-7-year-old-with-Downs-Syndrome-to-be-removed-148570995.html

[Ryan Tippens]

09:03 AM on 04/24/2012

I miss aol.....this hp is horrid.

[Gurus4You]

08:11 AM on 04/24/2012

Can they purchase someone to take over for Zuckerburg?

[karen lyons kalmenson]

06:52 AM on 04/24/2012

all hail the
zuckerbook
everyone
hooked after
just one look.

[socks154]

05:25 AM on 04/24/2012

Why cant a Facebook account be erased when you want to shut it down? Isnt that a violation of a persons privacy rights? Why do links or mail sometimes automatically turn a facebook account back on when it is shut down. Isnt that also a violation of a persons privacy rights?

[omgomghaxx]

05:42 AM on 04/24/2012

helps the cops arrest people :)

[Peter Combs]

11:13 PM on 04/23/2012

Bubble Bubble Bubble Bubble......they are fun to watch...

[ObamaLovesAll1]

11:05 PM on 04/23/2012

Why do people still use Facebook? It's time to grow up people.

[Ryan Tippens]

09:03 AM on 04/24/2012

the samething you said about tvs and cars?

[ObamaLovesAll1]

10:29 AM on 04/24/2012

You're comparing Facebook to cars? LOL LOL LOL LOL LOL LOL LOL LOL

Thanks for the laugh dude.

I can somewhat see the comparison to TV though.

[laZab]

10:45 AM on 04/24/2012

LOL! I drove to work this morning. Poor anology! But Good try though. I guess if you are one of those power users you may think FB is essential.

[HuftonPufton]

05:58 PM on 04/23/2012

Maybe Zuck could dump HP......

[lilsebastlan]

05:26 PM on 04/23/2012

Facebook is making it so, everything you do online will go through them. Exactly want the government wanted so they can watch your every move.

[Tristan S]

05:15 PM on 04/23/2012

Whoop-dee-Doo , WHO CARES IM WORRIED ABOUT MAKING MY RENT ON THE FIRST OF THE MONTH. HELLO EARTH IM IN THE REAL WORLD.

SIGNED,
HUMILITY

[petepar1]

05:15 PM on 04/23/2012

He can buy all he wants I don't "LIKE" facebook ..to prying and none of my busines is there's to sell ..Won't log on so i will do without just fine

[mmmmikkimac]

04:33 PM on 04/23/2012

Will either GATES or ZUCKERMAN PLEASE FIX AOL EMAIL? ITS A MESS! AND HAS BEEN FOR SEVERAL MONTHS NOW. SOME OF MY REGULAR EMAIL GOES TO SPAM,OTHERS DON'T SHOW UP UNLESS I ACCESS MY EMAAIL VIA GOOGLE CHROME. I HAD HOPED THAT WHEN MICROSOFT BOUGHT SO MANY PATENTS ONE OF THEM WOULD BE THE EMAIL AND THEY'D FIX IT. BUT NO, ITS STILL A MESS. CAN YOU TELL I'M NOT A HAPPY CAMPER? GRRRRRRRRRRRR

[enaud]

10:35 AM on 04/24/2012

There are so many other options out there its not worth your time to worry about it.....time to move on to another email provider.

[WilliamB]

04:30 PM on 04/23/2012

"As a stockholder, even a controlling stockholder, Mr. Zuckerberg is entitled to vote his shares, and shares over which he has voting control as a result of voting agreements, in his own interests, which may not always be in the interests of our stockholders generally."

ATTENTION WHINING FACEBOOK STOCKHOLDERS:

Nobody broke your arm to buy the stock. If you don't like the fact that Zuckerberg has controlling interest in his company, quit whimpering and sell the stock.Case closwed.

[enaud]

10:36 AM on 04/24/2012

Its not a public stock yet....the shareholders are the original investors of the company. I don't think any of them are whimpering.....just the jealous few who have no interest in the company.

[qud]

04:30 PM on 04/23/2012

so effectively this company is still a one-man band. I am not so sure of his true track record as a real businessman outside of facebook. Everything is easy when you throw Millions/billions at it. Time will tell. I'm not investing at this stage when the IPO trades publicly

[thomgrisso]

04:06 PM on 04/23/2012

Wow Gates strikes again buys it from Aol marks it up and sells it to the Z man laughing to the bank

[James R Langford II]

06:02 PM on 04/23/2012

clearly you didn't read the part where they sold it at a loss.

[Peter Combs]

11:15 PM on 04/23/2012

ahh...not actually, they kept 300 of the Patents and dumped 600+...I suspect they ones they sold figured into the Microsoft purchase at lower numbers...they then kept the best ones and are licensing them.