Facebook is set to pay Microsoft USD 550 million for
650 patents recently auctioned by AOL in its effort to boost its IP
for the looming litigation against Yahoo.
Under pressure from its stockholders to make changes to prevent
further revenue fall, AOL was obliged to sell and license over 800 patents to
Microsoft on April 9. It would retain over 300 applications and patents after
the auction.
Aside from the 800 patents bought by Microsoft, AOL will also give
them license to 300 patents it has retained for a tag of USD 1.056 billion. Thus,
Microsoft ultimately acquired 925 AOL patent applications and patents, 650 of
which will go to Facebook. The 2 firms has also agreed to license their patent
holdings to each other.
It is not yet clear what technologies Facebook has acquired rights
to or those that has remained with Microsoft. But considering that the legal
battle with Yahoo concerns messaging, social networking, etc, it looks like
Facebook would want to have ammunition of its own.
According to a statement from Springhill Group Home, the deal with
Facebook has allowed Microsoft to at least recoup more than half of its costs
while accomplishing its goals from the auction of AOL. However, it cannot be
readily said that Microsoft has really profited from the agreement as patent
valuing is a complicated process.
Microsoft has a relatively long history of close relationship with
the social network giant. In 2007, it has invested USD 240 million in
Facebook, giving it a 1.6% stake. Since then, the 2 firms have had
collaborations like Microsoft’s Bing search and search ad technologies being
used on Facebook. Its video chat technology also comes from Microsoft as it has
acquired Skype last year.
On the other hand, Microsoft also has a close business
relationship with Yahoo as Bing powers their advertising and search engine.
Yahoo has filed a lawsuit against Facebook for allegedly infringing 10 of its
patents covering online ad technology. Facebook then countersued
Yahoo for allegedly infringing 10 of its own patents.
“Nothing about today’s action changes the fact that Facebook
continues to infringe our patents. Companies who purchase patents are often
working from a position of weakness and take these actions to strengthen their
portfolio. We see today’s announcement as a validation of our case against
Facebook,” said Yahoo in a statement to Springhill Group Home.
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