BusinessDay: FOREIGN STAFF: Deal "unlocks current dollar value" for shareholders in AOL and software giant gets "valuable portfolio" it has been analysing in detail AOL yesterday announced plans to sell more than 800 patents to Microsoft in a $1,056bn deal giving the struggling internet pioneer a needed cash injection amid a race within the technology sector for intellectual property. The deal also provided Microsoft with licences to more than 300 additional patents and patent applications, AOL said. AOL CE Tim Armstrong said the deal "unlocks current dollar value for our shareholders and enables AOL to continue to aggressively execute on our strategy to create long-term shareholder value". Microsoft general counsel Brad Smith said the software giant was getting "a valuable portfolio that we have been following for years and analysing in detail for several months". He said Microsoft "was able to achieve our two primary goals: obtaining a durable licence to the full AOL portfolio and ownership of certain patents that complement our existing portfolio". AOL said that after the deal was complete, it would continue to hold "a significant patent portfolio of more than 300 patents and patent applications spanning core and strategic technologies". AOL also received a licence to the patents being sold to Microsoft. The patent sale includes stock in an AOL subsidiary on which AOL expects to post a loss for tax purposes, so AOL will offset most taxes in the deal. The company said it intended "to return a significant portion of the sale proceeds to shareholders and will determine the most efficient and effective method to do so prior to the closing of the transaction". Earlier this year a US hedge fund with a large stake in AOL sought five seats on the board and criticized the strategy of the current management for failing to deliver for shareholders. The sale to Microsoft is the latest major deal for patents. Last year, Google purchased Motorola Mobility for $12,5bn, largely for its patent portfolio. AOL has been losing money since the collapse of its leadership as an internet subscription service, and has been seeking to become a more diversified web company. Recent online content purchases include The Huffington Post last year.Source: BusinessDay
