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Wow! 1.1 Billion for patents! I have to wonder what M$ has up their sleeve on this one!

AOL Sells 800 Patents For $1.1 Billion To Microsoft

“This just in: one chapter of AOL’s patent journey is coming to an end. The company is selling 800 patents to Microsoft for just north of $1 billion: $1.056 billion in cash to be exact.

Tim Armstrong, the CEO of AOL (which owns TechCrunch), says that the company will continue to hold on to about 300 patents and patent applications after the sale. These span ‘core and strategic technologies’ around advertising, search and content generation, he noted in a memo to employees…

The sale to Microsoft came after a ‘competitive auction process’ the company noted in a statement. It also includes the sale of the stock of an AOL subsidiary (unspecified which in the statement) ‘upon which AOL expects to record a capital loss for tax purposes and as a result, cash taxes in connection with the sale should be immaterial.’

AOL also said it ‘expects to utilize approximately $40 million of its existing deferred tax assets, representing approximately 20 percent of its total deferred tax assets, to offset any ordinary income taxes resulting from the license of its remaining patent portfolio.’ We have reached out to try to get more specifics on the subsidiary and so licensee information for the remaining patents.

The sale is expected to be completed by the end of 2012.”