All the latest UK technology news, reviews and analysis

Facebook and Microsoft sign $550m patent deal

23 Apr 2012
Microsoft campus in Redmond

Microsoft and Facebook have announced a whopping $550m deal under which the social networking giant will be given the right to purchase a portion of the patent portfolio that Microsoft acquired from AOL.

Microsoft acquired almost 1,000 patents from AOL in an auction in April, and as a result of the deal announced on Monday, Facebook will take ownership of some 650 patents. Microsoft will still be able to use these under licence.

Microsoft will retain some 275 patents from the initial purchase. Brad Smith, executive vice president and general counsel at Microsoft, said the deal signed with Facebook was a strong outcome for the firm.

"Today's agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction," he said

"As we said earlier this month, we had submitted the winning AOL bid in order to obtain a durable licence to the full AOL portfolio and ownership of certain patents that complement our existing portfolio."

Facebook general counsel Ted Ullyot said the deal was an "an important acquisition for Facebook" as it seeks to protect itself in the wake of a recent legal threat from Yahoo.

"This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook's interests over the long term," he noted.

The $550m outlay adds to the $1bn Facebook has already agreed to splash on image service Instagram as the social network giant throws its weight around ahead of its flotation on the stock market. Expected in May, the IPO should value the company at around $100bn.

Analyst Michael Cherry of Directions on Microsoft, a research and analysis firm focused on the compapny, told V3 that Redmond could have a number of motivations for making the deal beyond financial gain.

He noted that with the company joining forces with its rivals in patent deals such as the Nortel buy, Microsoft could use the deal as a way to bank a bit of good will with Facebook.

"It may be that Microsoft is buying a friend for the future, if you help out someone today they might come to your aid later," he said.

"It is funny how these partnershps are coming together, they have made some strange bedfellows become friends."

  • Comment  
  • Tweet  
  • Google plus  
  • Facebook  
  • LinkedIn  
  • Stumble Upon  
Dan Worth

Dan Worth is the news editor for V3 having first joined the site as a reporter in November 2009. He specialises in a raft of areas including fixed and mobile telecoms, data protection, social media and government IT. Before joining V3 Dan covered communications technology, data handling and resilience in the emergency services sector on the BAPCO Journal

View Dan's Google+ profile

More on Social Networking
What do you think?
blog comments powered by Disqus

BYOD vs CYOD vs BYOC poll

Which approach is your firm taking to managing employees' mobile devices?

Popular Threads

Powered by Disqus
Sony Xperia Z2 Tablet powered by Android KitKat 4.4

Sony Xperia Z2 Tablet video

We take a look at the lightweight, waterproof tablet

Updating your subscription status Loading

Get the latest news (daily or weekly) direct to your inbox with V3 newsletters.

newsletter sign-up button

Data protection: the key challenges

Deduplication is a foundational technology for efficient backup and recovery


iPad makes its mark in the enterprise

The iPad can become a supercharged unified communications endpoint, allowing users to enhance their productivity

Software Development Manager (Agile, LAMP, MySQL, SDLC, Web)

Software Development Manager (Agile, LAMP, MySQL, SDLC...

C# .NET SQL Developer (.NET 4.5, MVC, JavaScript, SharePoint) L

C# .NET SQL Developer (.NET 4.5, MVC, JavaScript, SharePoint...

Developer / Analyst Programmer (C#, VB.NET, SQL, Sharepoint)

Developer / Analyst Programmer (C#, VB.NET, SQL, Sharepoint...

Infrastructure Support Analyst - Exchange 2010, Citrix XenApps, Projects, Prince2

Infrastructure Support Analyst – Exchange 2010, Citrix...
To send to more than one email address, simply separate each address with a comma.