Microsoft to sell 650 patents to Facebook

Microsoft and Facebook have been two peas in a pod recently and their corporate love is not going to end anytime soon with Facebook purchasing a share of the patents that the company has recently purchased from AOL.

AllthingsD broke the story shortly before Microsoft pushed out a press release stating that Facebook will purchase 650 patents from Microsoft for 550 million in cash. After the transaction completes, Microsoft will retain approximately 275 AOL patents.  An excerpt from Microsoft’s press release can be seen below:

“In the initial AOL auction, Microsoft secured the ability to own or assign approximately 925 U.S. patents and patent applications plus a license to AOL’s remaining patent portfolio, which contains approximately 300 additional patents that were not for sale.As a result of today’s agreement, Facebook will obtain ownership of approximately 650 AOL patents and patent applications, plus a license to the AOL patents and applications that Microsoft will purchase and own.

Upon closing of this transaction with Facebook, Microsoft will retain ownership of approximately 275 AOL patents and applications; a license to the approximately 650 AOL patents and applications that will now be owned by Facebook; and a license to approximately 300 patents that AOL did not sell in its auction.”

Because of the agreement today, Microsoft will recoup about half of the cost it incurred to purchase the patents. While clearly a win for all parties involved, Facebook and Microsoft must have had some backroom negotiations before Microsoft purchased the portfolio from AOL as this purchase comes not long after the company announced it would be buying the heart of Netscape. 

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