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AOL strikes $1b deal with Microsoft

Scott Eells/Bloomberg News

AOL’s deal with Microsoft gives the software company more than 800 patents and related applications.

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AOL Inc., under shareholder pressure to make changes as revenue shrinks, agreed to sell and license patents to Microsoft Corp. in a transaction valued at $1.06 billion. The arrangement, which will give more than 800 patents and related applications to Microsoft, lets New York-based AOL generate additional funds amid slow advertising growth and a decline in dial-up Internet subscribers. AOL, whose revenue has dropped 29 percent since it was spun off from Time Warner Inc. in 2009, has faced pressure from shareholder Starboard Value LP to consider moves such as a patent deal. Microsoft is adding the patents as it tussles with Motorola Mobility Holdings Inc. in the courts to protect intellectual property rights related to the Windows Phone operating system and Xbox video game consoles.

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