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What are the benefits Microsoft can get when they buy the AOL patents?
What's next with Microsoft?
First and foremost, I understand why you are asking this. Why would a multi billion dollar company buy patents from a company that is in a downturn?
What benefits would they gain from such an act?
The answer is simple, it is a form of monopolization in the internet business. Like all other aspects in business, whenever you buy out a smaller company, it secures your position in that business area.
Sure AOL is already in its downturn, but buying out your competition is not always about getting the income of the business, buying smaller businesses can gain you a tactical advantage against larger businesses that you consider as a competition;
This also means that any patent Microsoft buys from AOL gives them the advantage of integrating that technology to their own.
Think of it this way, the more patents you take from a smaller business means the less chance your other competitors could use them as leverage against you; In this case, Macintosh.
Patents can be applied to different things like with Smartphones and computer tablets which are valued market assets for companies engaging in the same technology. And since Microsoft is no small business or enterprise, it can utilize these patents for future related products.
Analysts say that acquiring more patents makes the business stronger in terms of negotiating and legal position with rival companies like Apple, Google, LG, Samsung, and HTC while the last 3 are handset makers which use Google’s Android software.
The patents that AOL wishes to sell consist of early internet patents like email, custom online advertisements, search, and instant messaging and it all amounts to 800 patents. Each of the 800 patents cost $1.3 million and Microsoft agreed to pay more than $1 billion for these 800 patents. AOL is an online pioneer and is continuously changing its focus to media.
It acquired TechCrunch and The Huffington Post, a technology news and gossip site.