Facebook beefs up patent arsenal ahead of IPO

SAN FRANCISCO: Facebook struck a $550 million deal Monday to get its hands on hundreds of AOL patents from Microsoft as the social network hardened its defenses before it goes public on the Nasdaq.

Facebook will pick up around 650 of the 925 patents Microsoft bought earlier this month in an auction from AOL in a nearly $1.1 billion deal, Facebook and Microsoft said in a statement.

Facebook's general counsel called the move "another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook's interests over the long term."

"Today's agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction," added Microsoft Executive Vice President Brad Smith.

Facebook also arranged to license the remaining 275 remaining patents or applications in the portfolio being bought by Microsoft, which gets the right to use the patented technology going to the California-based social network.

"Today's agreement with Microsoft represents an important acquisition for Facebook," said the social network's general counsel Ted Ullyot.

While the companies did not disclose specifics on the patents, AOL's trove of intellectual property is believed to include technology for messaging, search, imaging, and Internet telephony.

The patent deal enhances a longtime relationship between Facebook and Microsoft that has them apparently acting as allies against a common rival - Google.

Microsoft owns a small stake in Facebook, which is expected to go public next month in a much-anticipated stock market debut.

The company will trade on the technology-heavy Nasdaq exchange under the symbol "FB," it said in a filing with US regulators.

Facebook could raise as much as $10 billion in the largest flotation ever by an Internet company on Wall Street. (AFP)