Internet company AOL on Monday said it will sell over 800 of its patents to software giant Microsoft for $1.056 billion.
"The agreement with Microsoft represents the culmination of a robust auction process for our patent portfolio," AOL Chairman and CEO Tim Armstrong said in a release.
"This is a valuable portfolio that we have been following for years and analysing in detail for several months," Brad Smith, Microsoft general counsel, said in the release.
However, Microsoft did not specify the technologies or areas those 800 patents cover. In a press statement AOL said, it has entered into a definitive agreement to sell over 800 of its patents and their related patent applications to Microsoft Corporation and to grant Microsoft a non-exclusive licence to its retained patent portfolio for aggregate proceeds of $1.056 billion in cash.
AOL ran a competitive auction and by participating, 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, the release said. As part of the agreement, AOL received a licence 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 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.
Since the start of the year, Intel, Google and Facebook are among those to have bought significant number of patents from other technology companies.