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Microsoft Buys 800 AOL Patents For $1 Billion

Posted by samzenpus on from the all-your-patents-are-belong-to-us dept.

netbuzz writes "Marking the latest escalation in the technology industry's intellectual-property arms race, Microsoft is paying AOL a shade over $1 billion for 800 patents, the cream of which AOL CEO Tim Armstrong has described as 'beachfront property in East Hampton.' Armstrong insists they haven't left the cupboard bare: 'We continue to hold a valuable patent portfolio as highlighted by the license we entered into with Microsoft. The combined sale and licensing arrangement unlocks current dollar value for our shareholders and enables AOL to continue to aggressively execute on our strategy to create long-term shareholder value.'"

9 of 103 comments (clear)

  1. Bullshit by Anonymous Coward · · Score: 5, Funny

    "The combined sale and licensing arrangement unlocks current dollar value for our shareholders and enables AOL to continue to aggressively execute on our strategy to create long-term shareholder value."
    Congrats, i think you just made it possible to win bullshit bingo with a single sentence!

  2. Come on, now by HBI · · Score: 5, Insightful

    These guys insist on insulting our intelligence by stating that they're creating 'long term shareholder value' by selling assets. That's BS. The company is worth less today than it was yesterday, and Microsoft is worth more. How is a statement like that not tortious?

    --
    HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
    1. Re:Come on, now by HBI · · Score: 5, Insightful

      I don't see how Microsoft being the next Rambus is any better than AOL doing it themselves.

      Where has AOL been smart over the last 15 years or so? When the market was saturated for free sign-up CDs, that was about the end of AOL's innovation.

      --
      HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
    2. Re:Come on, now by wisnoskij · · Score: 5, Insightful

      What? Do you have no concept of what is going on here?
      Theoretically they just traded 1 billion dollars worth of useless patents that were just gathering dust for 1 billion dollars that they can use for anything.
      They are worth today exactly what they were worth yesterday.
      What they do with this influx of money will determine if they gain or lose value as a company.

      --
      Troll is not a replacement for I disagree.
    3. Re:Come on, now by Sir_Sri · · Score: 5, Interesting

      It matters what they're worth to the holder. AOL may not have been able to convert those patents into revenue other than by selling the patent outright (and obviously licencing some), whereas microsoft wasn't going to sell a product without the patent covering it. In that case the patents are worth different things to different people. MS may be able to add value, charge more, or make a new product, and being microsoft they will get more sales than if AOL did it.

      Account also gets messy, because microsoft has 57 billion dollars cash on hand, or, I guess, 56 now. But with the government bond market paying next to nothing they're losing ~500 million a year to inflation, which is also close to nothing, but still more than MS is getting from sitting on the cash means they're losing PPP value. They *could* pay that to investors instead (dividends basically), but then they'd lose a chunk to tax etc. Part of the 'cost' to microsoft is what else where they doing with that money, what would it be worth next quarter/year.

      Right now MS is probably getting 1% return on that cash pile, if they can get 2% on these patents from AOL that's a significantly better deal for them. And if it turns out to be a bad idea they have another 56 billion dollars waiting around, just in case.

  3. WOW AOL is still alive by Isaac-1 · · Score: 5, Funny

    Raise your hand if you knew AOL was still around?

    1. Re:WOW AOL is still alive by Anonymous Coward · · Score: 5, Informative

      Huffington Post, TechCrunch, Moviefone, MapQuest, Joystiq, Engadget

  4. In the end by daktari · · Score: 5, Funny

    We, as small time tech entrepreneurs, will be able to rest assured that we shall only be sued by either Apple, Microsoft or Google (or a combination of these). That should simplify matters.

    --
    A fool sees not the same tree that a wise man sees. -- Willam Blake
  5. 1980's: Merger Mania! 2010's: Patent Mania! by PolygamousRanchKid+ · · Score: 5, Insightful

    It really seems now that the Big Game Hunt in town is Patent Barter. Having world class patent attorneys, is more important to a company's long term tech strategy, than having world class researchers.

    You can come up with something brilliant, truly innovative on the tech front, but be devastated on the patent front. Thus, rendering your research worthless.

    Tech patent attorneys. This decade's Arms Race.

    --
    Schroedinger's Brexit: The UK is both in and out of the EU at the same time!