Microsoft has agreed to buy over 800 patents from AOL, and license the remainder still with the company, in a deal that is worth US$1.056 billion. And since the payment is in cash – this will give AOL a much needed cash injection for its long-term strategy to become a huge online media player.
The deal has pretty much stunned analysts as one told BusinessWeek at the end of March that it could be worth at its “absolute ceiling price” US$290 million.
AOL has not said what the 800 patents sold to Microsoft are in relation to, but it’s a big purchase for Microsoft. And it could have something to do with other companies engaging in patent wars – Facebook recently buying patents from IBM, and Google buying Motorola for US$12.5 billion in order to secure its Android manufacturers against Apple.