As per the source, Microsoft will get $550 million cash from Facebook, because hundreds of patents are being sold by AOL. This is an attempt from the social networking company in order to give volume to the lawsuit by Yahoo related to intellectual property right. Previously, the deal was related to have the largest initial public offering in Silicon Valley history. Now, it will entail 650 patents and patent applications to the social network. Also, it will give a license to another 275 patents and applications owned by Microsoft. Microsoft pursued eBay, Amazon, and other tech giants at the initial stage of this month with its more than $1 billion purchase of most of the collection from AOL Inc. patent.
Needless to say, patent valuation is not an easy process and the fact whether Microsoft has gained profit from the deal with Facebook is still vague. Brad Smith, who is General Counsel of Microsoft, prepared statement on Monday in Facebook deal, which allows it ‘to recoup over half of our costs while our goals from the AOL auction'. As per the source to Reuters, Facebook was also the participant in the AOL auction. The deal between Facebook and Microsoft are being portrayed as the world's topmost social company is getting ready for an initial public offering, which can go up to valuation of $100 billion. Also, it comes up as Facebook is fighting legal battle with Yahoo Inc.
Earlier this year, Yahoo fought legally against Facebook, by alleging that Facebook has breached 10 Yahoo patents, including online advertising technology. Facebook fought back with Yahoo in April, with the allegation that Yahoo is breaching 10 Facebook's patents. In March, Facebook gained 750 patents from International Business Machines Corp. Investment of $240 million in Facebook can be seen in the year 2007. Also, these two companies have instilled various business collaborations over the years. Facebook get search results from Microsoft's Bing search engine in its social networking service along with video chat technology provided by Skype, which Microsoft gained last year.