AOL announced yesterday that it is selling over 800 patents to Microsoft for the tidy sum of $1.056 billion in cash. Microsoft emerged the winner, after a competitive bidding process. AOL has not publicly disclosed which other firms participated in the bidding process. The patent sale is expected for formally close by the end of the year.
“The agreement with Microsoft represents the culmination of a robust auction process for our patent portfolio,” said Tim Armstrong, AOL’s Chairman and CEO in a statement. “We continue to hold a valuable patent portfolio as highlighted by the license we entered into with Microsoft.”
AOL isn’t selling its entire patent portfolio to Microsoft. AOL will be holding onto 300 patents for itself that cover a wide range of areas including search, security and social networking. Microsoft will also license back to AOL the patents it is acquiring for AOL’s usage.
“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,” Armstrong said.