(Reuters) – Microsoft trumped Amazon, eBay and other tech giants with its more than $1 billion purchase of the majority of AOL Inc’s patent trove.
AOL said it was selling more than 800 patents related to advertising, search, e-commerce and mobile to Redmond, Wash-based company, surprising investors with the size of the deal and sending AOL shares up more than 40 percent.
The sale includes technology rights from AOL’s current and former businesses, ranging from Netscape, ICQ and MapQuest to CompuServe, Advertising.com and others, according to a source close to the matter.
The sale process, which AOL Chief Executive Tim Armstrong described as a “full-blown dynamic auction,” started last fall after board approval.
Armstrong said he made a call to Microsoft Chief Executive Steve Ballmer alerting him of the decision to sell the patents.
The auction included e-commerce companies Amazon and eBay, both of which have been largely absent from the recent patent wars, as well as Google and Facebook, according to the source.
Spokesmen for Google, Facebook, eBay and Amazon were not immediately available for comment.
A final buyer was selected late on April 5, Armstrong said.
Technology companies in recent years have sparked a frenzy for patents, bidding up prices in a defensive move to keep competitors at bay.
The AOL deal is one of the larger patent auctions in recent times, representing roughly $1.3 million per issued patent, according to the source.
That compares with the bankrupt Nortel Networks patent auction last year — considered a blowout $4.5 billion sale of its 6,000 patents — for roughly $1.05 million per issued patent, the source said.
The Nortel deal sparked a wave of patent sales and litigation and played a part in AOL’s decision to launch a patent auction.