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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

April 9, 2012 at 6:41 AM

Microsoft buys AOL patents for $1 billion

AOL and Microsoft announced today an agreement in which Microsoft will pay AOL $1.056 billion for more than 800 of AOL’s patents.

Microsoft declined to say what technologies or areas those 800 patents cover.

“The agreement with Microsoft represents the culmination of a robust auction process for our patent portfolio,” Tim Armstrong, AOL’s chairman and CEO, said in a news release.

“This is a valuable portfolio that we have been following for years and analyzing in detail for several months,” Brad Smith, Microsoft general counsel, said in the news release. “AOL ran a competitive auction and by participating, Microsoft was able to achieve our two primary goals: obtaining a durable license to the full AOL portfolio and ownership of certain patents that complement our existing portfolio.

As part of the agreement, AOL received a license to the patents being sold to Microsoft.

The agreement also grants Microsoft non-exclusive use of 300 patents that are being retained by AOL. Those patents involve technologies related to advertising, search and social networking among other topics.

AOL said in the news release that its management and board intend to return a significant portion of the sale proceeds to shareholders. The sale is expected to be completed by the end of 2012.

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