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Category: WTO Sub-category: Intellectual Property
Document type: news
Facebook will pay Microsoft Corp $550 million for hundreds of patents that originated with AOL, beefing up its intellectual property arsenal.
The deal gives social network Facebook 650 patents and patent applications and license to another 275 patents and applications. It comes shortly before Facebook is expected to have the largest initial public offering in Silicon Valley history.
The patents, which Microsoft bought this year from AOL, cover a broad spectrum of technology, including mobile services, cell phone handsets, advertising and e-commerce.
Microsoft, at the AOL auction, trumped Amazon, eBay and other tech companies this month with its more than $1 billion purchase of most of AOL's patent trove.
Facebook was also a participant in the auction.
The auction included technology rights from AOL's current and former businesses, ranging from Web browser Netscape and instant messaging service ICQ to MapQuest and early online service CompuServe.
This purchase marks Facebook's second recent move to bolster its patent portfolio, which consists of 56 issued patents and 503 applications as of December 31, 2011, according to a filing with the U.S. Securities and Exchange Commission.
Moreover, in March, it acquired 750 patents from International Business Machines Corp.
Facebook's deal with Microsoft comes as the world's No.1 social networking company prepares for an initial public offering that could value it at up to $100 billion and as it battles Yahoo Inc. in court.
The deal for AOL's patents, which is subject to regulatory clearance, will help protect Facebook's interests over the long term.
The agreement between Facebook and Microsoft is the latest occasion that the world's No.1 online social networking service and the world's largest software company have teamed up.
Earlier in 2007, Microsoft invested $240 million in Facebook for what was then a 1.6% stake.
The two companies have forged various business collaborations over the years. Facebook features search results from Microsoft's Bing search engine in its social networking service as well as video chat technology provided by Skype, which Microsoft acquired last year.
However, late last month, Facebook was said to purchase 750 patents covering software and networking from IBM.
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Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook Inc. As of February 2012, Facebook has more than 900 million active users.
Microsoft Corporation is an American multinational corporation headquartered in Redmond, Washington, United States that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions.
AOL Inc. is an American global Internet services and media company. AOL is headquartered at 770 Broadway in New York.
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