AOL stock jumps 35% after patent pact
AOL said Monday that it has agreed to sell 800 of its patents and their related applications to Microsoft and grant it a license for its remaining patents for a total about $1.06 billion in cash.AOL said it plans to return some of the sale proceeds to its shareholders. The company’s shares jumped $6.46, or 35%, to $24.77 in pre-market trading. Microsoft shares slipped 22¢ to $31.30. After the sale, AOL said it will still hold more than 300 patents and applications covering a variety of core and strategic technologies including advertising, search, content generation, social networking, mapping, multimedia and security. AOL also received a license to the patents being sold to Microsoft. AOL chairman-chief executive Tim Armstrong said the deal with Microsoft resulted from a “robust” auction of the company’s patents. He said the company’s license agreement with Microsoft shows that it still holds a valuable patent portfolio. “The combined sale and licensing arrangement unlocks current dollar value for our shareholders and enables AOL to continue to aggressively execute on our strategy to create long-term shareholder value,” Armstrong said in a statement. AOL said it will determine the best way to distribute a “significant portion” of the sale proceeds to shareholders before the sale closes, which is expected to happen by the end of this year.