Once considered the face of the internet, America Online announced on Monday, April 9, that it finalized a deal to sell more than 800 of its patents to Microsoft for $1.06 billion.
AOL kept about 300 patents, while selling the rest in a formal auction which accepted bids until Thursday, April 5. The patents that Microsoft bought will mostly be used to protect the company from potential lawsuits, and give it power to attack possible rivals.
Struggling to evolve from being an internet service provider, AOL has been trying to transform itself into more of a media outlet, proven by its purchase of the news site Huffington Post last year. However, this shift has not been very successful, leading to the sale of the majority of AOL’s patents, one of the company’s most valued assets.
“It seems proactive of AOL to be auctioning off its patents to Microsoft,” said sophomore nursing major Adele Hart. “With AOL being rooted in dialup internet access, there is no way it is going to be able to progress much into a world of instant internet access.”
Meanwhile, there is debate as to whether this sale is merely for instant profit for AOL, or if it is a strategic move to push back towards investment relevance. After the sale, AOL shares were up more than 45 percent on Monday, April 9.
In a Wall Street Journal article, however, brand consultant Steve Beck warned that the sale is by no means a solution for AOL. “The deal creates a cash infusion and, in some ways at least, buys a little time for management to reposition AOL,” said Beck. “But the fundamental issues remain the same.”
Sophomore psychology major Nikkita Sarna agreed, saying, “In the short run, [the sale] will definitely help keep AOL alive, but the selling shows a lack of confidence AOL has in itself. It’s just giving the company more time to fight in a dying battle,” she said.