Patents arsenal: Why Facebook is buying
Patents accumulation is key strategy as Facebook prepares to go public. It bought $550 million worth of patents from Microsoft.
Patents accumulation is key strategy as Facebook prepares to go public. It bought $550 million worth of patents from Microsoft.
Microsoft聽Corp., which just bought聽patents聽from AOL Inc. for more than $1 billion, is now selling most of them to Facebook Inc. for $550 million.
The two companies said Monday that Facebook is buying about 650 of the 925聽patents聽and聽patent聽applications. Facebook will get a license to use the rest of the聽patents.聽Microsoft聽will also get a license to use the聽patentsthat Facebook is buying.
"Today's agreement with聽Microsoft聽represents an important acquisition for Facebook," said Ted Ullyot, Facebook's general counsel, in a written statement. "This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook's interests over the long term."
Facebook is loading up its intellectual property arsenal as it prepares for an initial public stock offering and fights a lawsuit brought by Yahoo Inc. last month. Facebook is countersuing.
The聽patents聽purchase comes amid accelerating litigation over who owns the rights to key technological innovation, particularly in the mobile arena. Facebook bought 750聽patents聽last month from International Business Machines Corp.
The AOL聽patents聽fetched three times what analysts had expected, but now聽Microsoft聽has essentially gotten back half of what it paid.聽Microsoft聽is a Facebook partner, having bought a 1.6 percent stake in the social networking giant in 2007 for $240 million.
"Facebook is just getting in the game. It goes to show that if you are a significant player in this landscape, you have to have聽patent聽protection," BGC Partners analyst Colin Gillis said. "Facebook realizes it's a target."