AOL and Microsoft have agreed to a patent sale worth more than $1bn.
The two firms said that the deal will provide an infusion of capital for AOL while bolstering Microsoft's intellectual property (IP) holdings.
Under the terms of the deal, Microsoft will pay $1.056bn for 800 AOL patents and licence rights to another 300 patents which the company will maintain control of.
In return, AOL will be granted licences to use all of the patents it sells to Microsoft.
AOL chief executive Tim Armstrong said that the deal will help the company raise money while maintaining many of its holdings.
"We continue to hold a valuable patent portfolio as highlighted by the licence we entered into with Microsoft," Armstrong said of the sale.
"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."
The sale marks the culmination of a months-long effort by AOL to cash in on its intellectual property portfolio.
The company has long-maintained that a sale of its patents could bring the firm more than $1bn in revenues and the prospect of a looming sale helped executives to ward off a shareholder revolt earlier this year.
For Microsoft, the deal grants the company an even larger patent portfolio at a time when intellectual property has become a valuable commodity.
"This is a valuable portfolio that we have been following for years and analysing in detail for several months," said Microsoft general counsel and executive vice president of legal and corporate affairs Brad Smith.
"AOL ran a competitive auction and by participating, Microsoft was able to achieve our two primary goals: obtaining a durable licence to the full AOL portfolio and ownership of certain patents that complement our existing portfolio."
Michael Cherry, lead operating systems analyst with research firm Directions on Microsoft, told V3 the purchase was just the latest in what has been an ongoing patent buying spree for Microsoft which has included both revenue-generating license deals and the offering of standards-related patents under the FRAND sharing model.
The analyst noted that both types of patents would be valuable to the company at a time when intellectual property was such a fiercely-debated topic.
"It is a hotbed now of claims and counterclaims, so it seems that everyone has been tightening up their portfolios and arsenals," Cherry explained.
"I am not sure you can predict these kinds of purchases other than to say that everybody is shopping for stuff."
Cotton seedling freezes to death as Chang'e-4 shuts down for the Moon's 14-day lunar night
Fortnite easily out-earns PUBG, Assassin's Creed Odyssey and Red Dead Redemption 2 in 2018
Meteor showers as a service will be visible for about 100 kilometres in all directions
Saturn's rings only formed in the past 100 million years, suggests analysis of Cassini space probe data
New findings contradict conventional belief that Saturn's rings were formed along with the planet about 4.5 billion years ago