Facebook to pay Microsoft $550 million in patent deal

Microsoft and Facebook have struck a deal, which will see the social networking giant purchase 650 patents from the software giant for $550 million in cash.

Facebook will secure a portion of patents that Microsoft agreed to acquire from AOL. Microsoft had originally agreed to purchase 925 US patents and applications from AOL, along with a license to an additional 300 patents.

The social networking site has secure 650 patents, in a move widely believed to strengthen its defence in the midst of infringement claims brought by Yahoo.

This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook's interests

Ted Ullyot, general counsel at Facebook labelled the deal as an important acquisition for the firm.

"This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook's interests over the long term," he noted in a joint statement.

Meanwhile, Microsoft is also happy with the deal, which could turn out to be a shrewd business move.

"Today's agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction," said Brad Smith, executive vice president and general counsel at Microsoft.