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Microsoft to buy 800 patents from AOL for $1 billion

Microsoft to buy 800 patents from AOL for $1 billion

By Associated Press | Updated: 5 June 2012 16:00 IST

Highlights

AOL has agreed to sell 800 patents and related applications to Microsoft and grant it a license for its remaining patents.

AOL said Monday that it has agreed to sell 800 of its patents and their related applications to Microsoft and grant it a license for its remaining patents for a total about $1.06 billion in cash.

New York-based AOL Inc. said it plans to return some of the sale proceeds to its shareholders.

The company's shares jumped $6.46, or 35 percent, to $24.77 in premarket trading. Microsoft shares slipped 22 cents to $31.30.

After the sale, AOL said it will still hold over 300 patents and applications covering a variety of core and strategic technologies including advertising, search, content generation, social networking, mapping, multimedia, and security among others.

AOL also received a license to the patents being sold to Redmond, Wash.-based Microsoft Corp.

Tim Armstrong, AOL's chairman and chief executive, said the deal with Microsoft resulted from a "robust" auction of the company's patents. He said the company's license agreement with Microsoft shows that it still holds a valuable patent portfolio.

"The combined sale and licensing arrangement unlocks current dollar value for our shareholders and enables AOL to continue to aggressively execute on our strategy to create long-term shareholder value," Amstrong said in a statement.

AOL said it will determine the best way to distribute a "significant portion" of the sale proceeds to shareholders before the sale closes, which is expected to happen by the end of this year.

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Further reading: AOL, Microsoft, Tim Armstrong

Microsoft to buy 800 patents from AOL for $1 billion

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