Microsoft to sell 550 m patent deal with Facebook

Facebook Inc. and Microsoft Corp have signed a deal Monday in which the social-networking firm will have the right to buy some of the patents the software giant will acquire from AOL Inc, MarketWatch reported.


Facebook will pay $550 million in cash in the agreement announced by the two companies. Shares of Microsoft fell about 1% to close at $32.12. AOL also slipped 1% to close at $24.75. Facebook is expected to go public sometime next month.

Under the deal, Facebook will own roughly 650 AOL patents and patent applications, “plus a license to the AOL patents and applications that Microsoft will purchase and own,” the companies said.


Microsoft recently secured the right to acquire 925 of AOL’s US patents and patent applications, along with a license to the rest of the online company’s patent portfolio of about 300 additional patents that were not for sale.


The software giant 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.”


The deal comes two weeks after Facebook announced that it buying Instagram, the mobile photo-sharing service, for about $1 billion, and also highlights the growing importance of patents in the technology industry.