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Print 21 comment(s) - last by WalksTheWalk.. on Apr 10 at 1:02 PM

AOL maintains rights to use patents after sale

AOL announced today that it has signed a deal to sell more than 800 of its patents o Microsoft. Microsoft is also licensing 300 additional patents and patent applications from AOL. The deal will cost Microsoft $1.056 billion in cash and the 300 patents that Microsoft is licensing are on a non-exclusive basis.
 
The patents that AOL is holding onto, but licensed to Microsoft, include some that span core strategic technology such as advertising, search, content generation management, social networking, mapping, multimedia and streaming, and security among others. AOL also maintains the license to use technology covered in patents that it sold to Microsoft.
 
“The agreement with Microsoft represents the culmination of a robust auction process for our patent portfolio,” said Tim Armstrong, AOL’s Chairman and CEO. “We continue to hold a valuable patent portfolio as highlighted by the license we entered into with Microsoft. The combined sale and licensing arrangement unlocks current dollar value for our shareholders and enables AOL to continue to aggressively execute on our strategy to create long-term shareholder value.”
 
AOL points out the sale of patents included the sale of stock in AOL subsidiary company and that it expects to record a capital loss for tax purposes as a result of the sale. AOL also noted that it plans to use about $40 million in existing deferred tax assets offset any ordinary income taxes resulting from the licensing of its patent portfolio. That $40 million is about 20% of AOL's total deferred tax assets.
 
“This is a valuable portfolio that we have been following for years and analyzing in detail for several months,” said Brad Smith, General Counsel and Executive Vice President, Legal and Corporate Affairs, Microsoft. “AOL ran a competitive auction and by participating, Microsoft was able to achieve our two primary goals: obtaining a durable license to the full AOL portfolio and ownership of certain patents that complement our existing portfolio.”
 
AOL and Microsoft expect the transaction to be completed by the end of 2012. The purchase is contingent on typical conditions and regulatory approvals.

Source: AOL



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What Does AOL Even Do?
By Arsynic on 4/9/2012 11:06:42 AM , Rating: 2
The biggest surprise is that they still actually exist. Next think you know, we'll be talking about CompuServe again.




RE: What Does AOL Even Do?
By Motoman on 4/9/2012 11:15:32 AM , Rating: 2
RE: What Does AOL Even Do?
By kattanna on 4/9/2012 11:32:25 AM , Rating: 2
LOL that site looks like it is still tailored to run on your dial-up account


RE: What Does AOL Even Do?
By Motoman on 4/9/2012 1:04:12 PM , Rating: 2
That appears to be Compuserve's only line of business. They even still have Netscape branding all over everything.

I can't remember the last time I saw that logo...


RE: What Does AOL Even Do?
By Samus on 4/9/2012 11:32:51 AM , Rating: 5
I still can't believe the cost of this patent war Steve Jobs started.

Even in death, the man is holding back innovation.


RE: What Does AOL Even Do?
By tayb on 4/9/2012 11:43:46 AM , Rating: 1
LOL. Steve Jobs created a patent war?? Who knew. I was under the assumption this crap has been going on for the past 15 years.

I seem to remember some patent troll suing Microsoft and Sony for infringing on his patent for a vibrating controller. Well before the iPhone was even a twinkle in Steves eye.


RE: What Does AOL Even Do?
By jeepga on 4/9/2012 11:57:27 AM , Rating: 3
Patent lawsuits have been occuring since patent law was created. Steve Jobs brought this to a new level.


RE: What Does AOL Even Do?
By tayb on 4/9/12, Rating: -1
RE: What Does AOL Even Do?
By Digimonkey on 4/9/2012 1:54:27 PM , Rating: 2
Less than a year ago, and yes.


RE: What Does AOL Even Do?
By tayb on 4/9/12, Rating: -1
RE: What Does AOL Even Do?
By Digimonkey on 4/9/2012 4:48:17 PM , Rating: 4
What? Wars have allies. Haven't you noticed the lack of conflict between Microsoft and Apple for quite awhile now? They have a common enemy.


RE: What Does AOL Even Do?
By Omega215D on 4/9/2012 11:48:27 PM , Rating: 2
despite the common.enemy they both have so many patents it would be a stalemate or a pyrrhic victory for one of them. Not to mention the fanaticism of Apple diehard Apple users.


RE: What Does AOL Even Do?
By Theoz on 4/9/2012 1:12:48 PM , Rating: 2
You give him far too much credit. This stuff has been going on forever.


RE: What Does AOL Even Do?
By Flunk on 4/9/2012 11:45:17 AM , Rating: 2
Patent Troll


RE: What Does AOL Even Do?
By Dr of crap on 4/9/2012 12:37:45 PM , Rating: 2
What does AOL do?
Makes a HUGH amount of cash from Microsoft.
And reports a tax loss on the sale?? - don't understand that one.

The question - is this a good buy for Microsoft?


RE: What Does AOL Even Do?
By kmmatney on 4/9/2012 12:48:39 PM , Rating: 2
I don't see how anything from AOL can be "good" at this point in time - especially for $1B.


RE: What Does AOL Even Do?
By Solandri on 4/9/2012 12:58:37 PM , Rating: 2
A deferred tax asset offset is a tax credit from previous years, usually from when your business ran a loss. It's basically time-averaging the taxes across many years to smooth out the peaks and valleys, combining your taxes for multiple years instead of calculating them year by year snapshot.

Without it, you can get silly situations like a company which lost a bunch of money during a single year paying more taxes long-term than a company which made more money. e.g. Say these are the profit/losses for each company over 5 years:

Company A: $200k, $200k, $200k, $200k, $200k.
Company B: $300k, -$1 million, $300k, $300k, $300k.

Over a 5-year span, Company A made $1 million profit and owes taxes on $1 million. Company B only made $200k profit ($1.2 mil - $1 mil), but owes taxes on $1.2 million. Company B made 1/5th the amount of money that Company A did, but it owes more taxes.


RE: What Does AOL Even Do?
By symbiosys on 4/10/2012 4:25:44 AM , Rating: 2
Thanks for that info Solandri, never could really get my head around differed tax. But you made it nice and simple :D

+1


Patents Galore
By ricardonest on 4/9/2012 5:57:35 PM , Rating: 2
With Microsoft acquiring all these patents from AOL, you cannot help but be curious as to how many patents each company holds currently. Check it out:

Microsoft: http://bit.ly/HEY6Zq

AOL: http://bit.ly/HfsetS




RE: Patents Galore
By WalksTheWalk on 4/10/2012 1:02:16 PM , Rating: 2
Here's patent issues on 12/20/2011 for all sorts of existing authentication schemes. All your patent belong to us!!

quote:
Systems and techniques for transmitting electronic data by receiving, at a communications system host, electronic data transmitted from a sender and addressed to an intended recipient; authenticating the electronic data based on attributes of the electronic data and appending information to the electronic data indicating that the electronic data has been authenticated.


Microsoft bought Netscape
By hellokeith on 4/9/2012 5:33:50 PM , Rating: 2
allthingsd.com is reporting the unnamed AOL subsidiary as: Netscape




"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997











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