Facebook just bought 650 patents and AOL applications from Microsoft for $ 550 million. This purchase is done just a few weeks after buying Instagram for $ 1 billion.
Previously, Microsoft had purchased AOL patent for $ 1 billion in cash. Microsoft today announced it has only 275 patents from AOL, as 650 patents and other applications was purchased by Facebook on Monday (04/23/2012) local time.
However, Microsoft also said it has a license agreement for those 650 patent.
"The agreement today with Microsoft showed how important this acquisition to Facebook. This is another significant step taken to build a portfolio of intellectual property to protect Facebook for long time," said Ted Ullyot, Facebook lawyers.
Brad Smith, Executive Vice President and Microsoft lawyer, added that the deal with Facebook is able to cover half the cost of AOL patent ownership.
Zeus Kerravala, an analyst from ZK Research, said he did not know the specific reason why Microsoft sell AOL patents in short time after purchase. From Facebook side, Kerravala said that they bulk up portfolio to enhance share value ahead the IPO.
"Facebook has a lot of money. All they need is a valuation. Having a patent means they have the potential to enter into broader market," he said.
Previously, Microsoft had purchased AOL patent for $ 1 billion in cash. Microsoft today announced it has only 275 patents from AOL, as 650 patents and other applications was purchased by Facebook on Monday (04/23/2012) local time.
However, Microsoft also said it has a license agreement for those 650 patent.
"The agreement today with Microsoft showed how important this acquisition to Facebook. This is another significant step taken to build a portfolio of intellectual property to protect Facebook for long time," said Ted Ullyot, Facebook lawyers.
Brad Smith, Executive Vice President and Microsoft lawyer, added that the deal with Facebook is able to cover half the cost of AOL patent ownership.
Zeus Kerravala, an analyst from ZK Research, said he did not know the specific reason why Microsoft sell AOL patents in short time after purchase. From Facebook side, Kerravala said that they bulk up portfolio to enhance share value ahead the IPO.
"Facebook has a lot of money. All they need is a valuation. Having a patent means they have the potential to enter into broader market," he said.
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