Microsoft shows patent-war newcomers how it's done with AOL deal

In one smooth move, Microsoft is pocketing $550 million by selling hundreds of patents it bought from AOL to Facebook.
Written by Mary Jo Foley, Senior Contributing Editor

A week ago, Microsoft bought more than 900 patents from AOL for a billion dollars. On April 23, the Softies turned around and sold to Facebook more than 600 of those patents -- and recouped $550 million in the process.

That, young patent-war whippersnappers, is how it's done.

They say the more you do something -- anything -- the better you ultimately get at it. Microsoft has been in the business of buying, selling and threatening others using its patent war chest as its defense. The company's latest patent transaction shows you what you get when you have thousands of lawyers on your payroll.

Today's move didn't come out of the blue. A week ago, Bloomberg reported that Facebook had been eyeing the AOL patents in question. Bloomberg also noted that Microsoft might even end up selling some of the AOL patents it acquired to Facebook.

Many had assumed that Google might be the one most interested in AOL's patent war chest, especially since Netscape -- which AOL acquired way back in 1998 -- was part of the set of properties AOL was selling. If you're in the browser business, like Microsoft or Google, wouldn't you want to own as many browser-related patents as possible? But News.com reported that Google ended up not bidding for AOL's patents in the end.

The most interesting piece here, at least to this Microsoft watcher, is which of AOL's patents Microsoft kept. That's not something the Redmondians are sharing. But News.com did dissect what kinds of patents were likely part of the original group of 925, and found some interesting gems in there.

Any guesses as to what Microsoft wanted with the original AOL patent portfolio? Do you think Microsoft's original plan was to flip half of the bunch to Facebook -- possibly to help Facebook arm itself against Yahoo (which just happens to also be a key Microsoft partner in the search area)?

Editorial standards