Microsoft Buys 800 AOL Patents For $1 Billion 103
netbuzz writes "Marking the latest escalation in the technology industry's intellectual-property arms race, Microsoft is paying AOL a shade over $1 billion for 800 patents, the cream of which AOL CEO Tim Armstrong has described as 'beachfront property in East Hampton.' Armstrong insists they haven't left the cupboard bare: 'We continue to hold a valuable patent portfolio as highlighted by the license we entered into with Microsoft. 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.'"
Patents expire (Score:5, Interesting)
Re:Come on, now (Score:5, Interesting)
It matters what they're worth to the holder. AOL may not have been able to convert those patents into revenue other than by selling the patent outright (and obviously licencing some), whereas microsoft wasn't going to sell a product without the patent covering it. In that case the patents are worth different things to different people. MS may be able to add value, charge more, or make a new product, and being microsoft they will get more sales than if AOL did it.
Account also gets messy, because microsoft has 57 billion dollars cash on hand, or, I guess, 56 now. But with the government bond market paying next to nothing they're losing ~500 million a year to inflation, which is also close to nothing, but still more than MS is getting from sitting on the cash means they're losing PPP value. They *could* pay that to investors instead (dividends basically), but then they'd lose a chunk to tax etc. Part of the 'cost' to microsoft is what else where they doing with that money, what would it be worth next quarter/year.
Right now MS is probably getting 1% return on that cash pile, if they can get 2% on these patents from AOL that's a significantly better deal for them. And if it turns out to be a bad idea they have another 56 billion dollars waiting around, just in case.
Re:Come on, now (Score:4, Interesting)
AOL is a huge blog aggregator now. Engadget, HuffPo, Patch and hundreds of others. the days of the indie blogger are over