Faltering Internet icon AOL squeezed out more than $1 billion from Microsoft for a trove of some 800 patents in an auction, the latest sign of just how valuable such portfolios can be for the world's biggest technology companies.
"There is a fight for market share occurring on multiple fronts -- technology, patents, advertising," said Colin Gillis, an analyst with BGC Financial who covers Microsoft. "Microsoft, more so than others out there, has been (using) its patent portfolio as a way to generate license fees. This should strengthen that."
Microsoft refused to say what the patents cover. Benchmark analyst Clayton Moran said they involve Internet technology, including advertising, search and mapping. This would help Microsoft go up against Google, a big rival that is ahead of it in all three areas.
Patents have become a hot commodity in the high-tech industry in recent years. They're useful both for attack -- for suing competitors -- and for defense -- for warding off lawsuits with threats of countersuits.
Rising star Facebook, for instance, recently purchased 750 patents from IBM, a move that likely helped the company defend itself after Yahoo accused it of violating 10 Yahoo patents.
Facebook shot back with its own lawsuit, claiming Yahoo is violating 10 Facebook patents.
Software patents can have broad applications, and thousands of patents can apply to a complicated product like a cell phone.
Google is buying phone maker Motorola Mobility Holdings for $12.5 billion, in large part for its patents.
AOL's shares surged to their highest level in more than a year following the announcement. The company agreed to sell 800 of its patents and license others to Microsoft for about $1.06 billion in cash. The New York-based website developer and Internet access company said it plans to return some of the sale proceeds to its shareholders.
After the sale, AOL said it should have about $15 per share of cash on hand.
AOL rose 43% to $26.40 at the close in New York, the biggest one-day increase since Nov. 25, 2009. The shares had lost 8.2% of their value in the past year. Microsoft, meanwhile, fell 1.3% to $31.10 Monday.
AOL's move signals that it's listening to stockholders who are asking for more return on their investment.
In February, one of AOL's largest shareholders, an investment firm, said it will nominate candidates for the company's board because it wasn't doing enough to make money from its patents.
AOL said at the time that it had already begun to look at ways to unlock patent value.
After the sale, AOL said it will still hold more than 300 patents and applications covering a variety of technologies, including advertising, search, content generation, social networking, mapping, multimedia and security.
（Source: Associated Press）
