AOL completes $1 billion patent sale to Microsoft


AOL / America OnlineThe transaction includes the sale of over 800 patents and their related patent applications, and grants Microsoft a non-exclusive license to its retained patent portfolio for aggregate proceeds of $1.056 billion in cash.

“The closing of this transaction represents another major step for AOL in increasing value for our shareholders,” said Tim Armstrong, Chairman and CEO. “As our track record has shown, you should expect us to continue our momentum of creating and unlocking shareholder value through continued operational improvements and executing on our strategy.”

The deal clears enables AOL to “continue to aggressively execute on its strategy to create long-term shareholder value.” As previously announced, AOL is committed to returning 100% of the patent proceeds to shareholders. AOL’s Board and management team are currently working on determining the most efficient and expedient method to return the proceeds of the transaction. AOL expects to provide additional details to all shareholders by the end of this month.

As a part of the transaction AOL also received a license to the patents being sold to Microsoft. AOL holds a patent portfolio of over 300 patents and patent applications spanning core and strategic technologies, including advertising, search, content generation/management, social networking, mapping, multimedia/streaming, and security among others.

RBR-TVBR observation: With AOL’s shrinking advertising and market share over the past years, this is a quick way to get some ROI for investors. The good news is the company can still use those patents and focus more on expanding and re-building the brand offering.