Microsoft and Facebook Align Further With Patent Deal


Coverage Type: reporting
Location:
Facebook (new HQ), 1601 Willow Road, Menlo Park, CA, United States

Less than two weeks after Microsoft paid America Online more than $1 billion for a trove of patents, Microsoft is selling or licensing those same patents to its online ally, Facebook, for $550 million.

The deal allows Facebook to bulk up its intellectual property portfolio ahead of the social networking company’s initial public offering, expected next month, and it is a further sign of the growing importance of stockpiling patents in the arsenal of any big technology company. It also shows how Microsoft and Facebook have gravitated increasingly closer to each other in large part because of a common enemy: Google. The deal could give Facebook additional ammunition in an escalating patent feud with Yahoo. Yahoo sued Facebook earlier this year, claiming violations of Yahoo patents, many of them related to online advertising. Facebook subsequently countersued Yahoo, in a pattern that is playing out again and again in different parts of the technology business, especially the mobile phone market.

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