You’ve got $1 billion: Microsoft buying AOL patents

In the latest Big Patent Deal, AOL shares are up more than 40 percent (about $8 to $26.40 as of this post) after announcing Monday that Microsoft will pay it $1 billion for 800 patents.

AOL became serious about shopping its patents after pressure from a shareholder, according to the Wall Street Journal. In Monday’s announcement, AOL CEO Tim Armstrong said the deal “represents the culmination of a robust auction process for our patent portfolio.”

The AOL-Microsoft deal, along with the recently started patent fight between Facebook and Yahoo, indicates that the tech tussles over who did what first will probably continue to spread increasingly beyond the world of smartphones. Because AOL was a pioneer in instant messaging and email, its patent portfolio includes technology that one patent research firm reportedly called “fundamental” to online communications.

Microsoft has skillfully used patent litigation to stick it to competitors: It makes money from Android smartphones made by Samsung, HTC and others. Now, among the AOL patents it is buying are some related to the underlying technology of Netscape, says Peter Kafka at AllThingsD. Microsoft’s Internet Explorer appears to be regaining ground it had lost to competitors Firefox and Chrome. Now it appears to have more ammunition for that fight, courtesy of the old Web browser it vanquished long ago.

Since we mentioned Yahoo, it has some parallels with AOL. Both are old-time tech companies struggling to turn themselves into media companies; both are facing proxy fights; and both are trying to use patents to their advantage. In AOL’s case, it looks to have paid off. In Yahoo’s case, all it has so far from a patent fight it recently picked with Facebook is a countersuit and, some say, the scorn of Silicon Valley. (See Sue happy together: Yahoo threatens patent suit against Facebook… and Ex talk: Former Yahoo on Facebook patent suit…)



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  • Maybe the solution to high tech wars is make internet technology open source and public domain. After all, the question delivering compelling products and service, built using high quality tools.

    Consumers don’t care much about what makes it run, just whether it does what they want. Easily, reliably, with NO need for tech support (an ideal).

    And that is the real challenge.

  • Bryan Harrison

    When you can’t create, litigate.