Facebook Buys 650 Patents For $550 Million From Microsoft

Sites include Facebook.com , Microsoft.com . Published on May 13th, 2012. Written by Anthony West.

Facebook spent $1 billion to acquire Instagram and now it has slashed out another $550 million—this time for patents.

The social networking giant has inked a deal that will see Microsoft transfer 650 of the 925 patents it [Microsoft] acquired from AOL just last month. The deal seems to have a lot more than just an upfront cash benefit for Microsoft who will retain licenses for all 650 patents that are now being transferred to Facebook.

According to a statement by Microsoft’s executive VP, Brad Smith, “Today’s agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction.”

The quick handover of the patents does raise some questions however, not least because Facebook could have acquired these patents itself. The wheeling and dealing by Microsoft is perhaps a likely explanation for the way things have played out. After all, few tech companies have the spending power that Microsoft has and so perhaps only it could have gained access to AOL to secure such a deal.

Still, these patents are obviously quite useful and so it will be interesting to see in what ways they are employed in the Facebook development apparatus. When they do present themselves, it should add some powerful features and functions to Facebook’s architecture.