Facebook And Microsoft Reach $550m Deal Over AOL Patents

Microsoft and Facebook have announced an agreement that would see Facebook making use of some of Microsoft's patent portfolio recently acquired from AOL. Facebook has agreed to purchase the patents for $550 million. Microsoft purchased around 925 patents from AOL as part of the original deal, and will be selling around 650 patents to Facebook.

While Microsoft has sold those 650 patents to Facebook, it will still be able to leverage them under a license agreement, and still holds ownership over around 275 of AOL's patents and applications. Microsoft has also licensed around 300 additional patents from AOL that the latter company did not offer for sale originally.

It looks to be a strategic move from Microsoft, who says it "achiev[ed] our goals from the AOL auction" while recouping half the costs. Brad Smith, executive vice president and general counsel for Microsoft, says, "As we said earlier this month, we had submitted the winning AOL bid in order to obtain a durable license to the full AOL portfolio and ownership of certain patents that complement our existing portfolio."

Meanwhile, Facebook say it made the move as parts of an effort to grow its intellectual patent portfolio to "protect Facebook's interests over the long term." The deal isn't finalized yet, and is expected to go through closing conditions.