AOL Sells 800 Patents to Microsoft for $1.1 Billion

AOL

Kristin Jones reports for The Wall Street Journal:

AOL Inc. agreed Monday to sell more than 800 patents and related applications, along with a nonexclusive license to its remaining portfolio of patents, to Microsoft Corp. for about $1.1 billion.

In essence, AOL has sold over three-quarters of its patent portfolio. While the money certainly seems good — particularly given the company’s recent struggles and various identity crises — such a move does not bode well for the company’s long-term prospects.

As with its early-Internet companion, Yahoo!, AOL is framing itself in an increasingly desperate and unattractive light. Liquid cash for reinvestment may aid in the short-term, but I imagine losing such a vast quantity of patents will only serve to further undercut the company’s relevance in coming years.

Holding strategically few patents, AOL is ostensibly angling itself to rely primarily upon its media presence as the breadwinning portion of the company. Keeping the turmoil regarding Arianna Huffington in mind, such a decision is undoubtedly set to come into severe question.

Still, with shareholders temporarily satiated, perhaps we can hope Mr. Armstrong, AOL’s Chairman and CEO, has some phenomenal new media initiative up his sleeve?

I tend to think not.

The full press release can be found here.