Facebook buys $550M in AOL patents from Microsoft

Microsoft and Facebook, which have struck a variety of business, technology and advertising agreements in recent years, announced on Monday a deal related to patents AOL recently sold.

As part of the deal, Facebook has agreed to buy aportion of thepatents Microsoft recently acquired from AOL. Facebook will payMicrosoft US$550 million in cash for around 650 AOL patents and patentapplications, plus a license to the AOL patents and patent applicationsMicrosoft will buy.

Earlier this month, Microsoft agreedto pay $1.06 billion in cash to own or assign around 925 AOL patentsand obtain a nonexclusive license to more than 300 patents AOL isretaining.

Areas covered by the patents in question include online advertising,search, content generation and management, social networking, mapping,multimedia and streaming, and security.

When the Facebook deal closes, Microsoft will own around 275 AOLpatents and patent applications, a license to the 650 Facebook will ownand a license to the around 300 patents AOL retained.

Facebook’s Yahoo patent battle
Microsoft’s deal with Facebook allows Microsoft to recover more thanhalf of what it spent in the AOL deal, while achieving its goals,Microsoft’s General Counsel Brad Smith said in a statement.

Smith’s counterpart at Facebook, Ted Ullyot, said in the statement thatthis deal is another step in the company’s process to build a patentportfolio.

Facebook and Microsoft partner in a variety of areas, as they battlecommon foe Google in markets including social networking, search,online advertising, mobile and cloud applications.

It has become popular among large IT vendors to spend considerableamounts of money bulking up their patent holdings as proactivelydefensive measures against possible intellectual property lawsuits.

In Facebook’s case, it is currently facing such a lawsuit from Yahoo,which alleges Facebook has infringed in 10 of its patents. The lawsuit,filed in March, states that the infringed-upon patents cover areas likeonline advertising. Weeks later Facebook fired back with apatent-infringement counter-suit against Yahoo.

Juan Carlos Perez covers enterprisecommunication/collaboration suites, operating systems, browsers andgeneral technology breaking news for The IDG News Service.Follow Juan on Twitter at @JuanCPerezIDG.

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