Microsoft, Facebook Announce AOL Patent Portfolio Agreement

Facebook Microsoft AOL Patent Purchase

Microsoft Corp. and Facebook announced today a definitive agreement under which Microsoft will assign to Facebook the right to purchase a portion of the patent portfolio it recently agreed to acquire from AOL Inc. Facebook has agreed to purchase this portion for $550 million in cash.

In the initial AOL auction, Microsoft secured the ability to own or assign approximately 925 U.S. patents and patent applications plus a license to AOL’s remaining patent portfolio, which contains approximately 300 additional patents that were not for sale.

As a result of today’s agreement, Facebook will obtain ownership of approximately 650 AOL patents and patent applications, plus a license to the AOL patents and applications that Microsoft will purchase and own.

Upon closing of this transaction with Facebook, Microsoft will retain ownership of approximately 275 AOL patents and applications; a license to the approximately 650 AOL patents and applications that will now be owned by Facebook; and a license to approximately 300 patents that AOL did not sell in its auction.

“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, Microsoft. “As we said earlier this month, we had submitted the winning AOL bid in order to obtain a durable license to the full AOL portfolio and ownership of certain patents that complement our existing portfolio.”

“Today’s agreement with Microsoft represents an important acquisition for Facebook,” said Ted Ullyot, general counsel, Facebook. “This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook’s interests over the long term.”

The parties are evaluating the accounting treatment for these transactions. These transactions are also subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

About Facebook

Founded in 2004, Facebook’s mission is to make the world more open and connected. People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.

Facebook® is a registered trademark of Facebook Inc. Other names may be trademarks of their respective owners.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Forward-Looking Statements

Statements in this release about Microsoft that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

  • execution and competitive risks in transitioning to cloud-based computing;
  • challenges to Microsoft’s business model;
  • intense competition in all of Microsoft’s markets;
  • Microsoft’s continued ability to protect its intellectual property rights;
  • claims that Microsoft has infringed the intellectual property rights of others;
  • the possibility of unauthorized disclosure of significant portions of Microsoft’s source code;
  • actual or perceived security vulnerabilities in Microsoft products that could reduce revenue or lead to liability;
  • improper disclosure of personal data that could result in liability and harm to Microsoft’s reputation;
  • outages and disruptions of services provided to customers directly or through third parties if Microsoft fails to maintain an adequate operations infrastructure;
  • government litigation and regulation affecting how Microsoft designs and markets its products;
  • Microsoft’s ability to attract and retain talented employees;
  • delays in product development and related product release schedules;
  • significant business investments that may not gain customer acceptance and produce offsetting increases in revenue;
  • unfavorable changes in general economic conditions, disruption of our partner networks or sales channels, or the availability of credit that affect demand for Microsoft’s products and services or the value of our investment portfolio;
  • adverse results in legal disputes;
  • unanticipated tax liabilities;
  • quality or supply problems in Microsoft’s consumer hardware or other vertically integrated hardware and software products;
  • impairment of goodwill or amortizable intangible assets causing a charge to earnings;
  • exposure to increased economic and regulatory uncertainties from operating a global business;
  • geopolitical conditions, natural disaster, cyberattack or other catastrophic events disrupting Microsoft’s business; and
  • acquisitions, joint ventures and strategic alliances that adversely affect the business.

For further information regarding risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/investor.

All information in this release is as of April 23, 2012. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

Facebook Launches Facebook Groups for Schools

Facebook just announced the launching of Facebook Groups for Schools, which allow people with an active school email address to join groups at their college or university.

See what’s happening on campus
You can join Facebook groups for schools and find a group for your major to discuss classes, for your sorority to plan upcoming events, or for your dorm to share photos.

Groups for Schools
Photo of Wisconsin by Richard Hurd

We are also introducing file sharing for these Facbook groups for schools, to make it even easier to share lecture notes, sports schedules or class assignments.

Groups for Schools

Facebook Groups for Schools will gradually be rolling out to colleges and universities around the world. You can sign up to find out when it will be available at your school. To learn more about how to use Facebook Groups at Schools, visit the Help Center.

Top 10 Social Networking Websites April 2012

Top 10 Visited Social-Networking Websites & Forums, April 2012

Rank Website U.S. Market Share of Visits
1 Facebook 63.0%
2 YouTube 20.3%
3 Twitter 1.73%
4 Yahoo! Answers 0.97%
5 Pinterest 0.92%
6 Linkedin 0.77%
7 Tagged 0.63%
8 Google+ 0.58%
9 MySpace 0.41%
10 Yelp 0.36%

Facebook Announces Acquisition of Instagram

Instagram Acquired by Facebook

Facebook Acquires Popular Mobile App Instagram

Facebook announced today that it has reached an agreement to acquire Instagram, a fun, popular photo-sharing app for mobile devices. The total consideration for San Francisco-based Instagram is approximately $1 billion in a combination of cash and shares of Facebook. The transaction, which is subject to customary closing conditions, is expected to close later this quarter.

Mark Zuckerberg, founder and CEO of Facebook, posted about the transaction on his Timeline:

I’m excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining Facebook.”

Zuckerberg goes on to say in the Facebook Official Statement:

“For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests. We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook. That’s why we’re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.”

“We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.”

“These and many other features are important parts of the Instagram experience and we understand that. We will try to learn from Instagram’s experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.”

“This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.  We’re looking forward to working with the Instagram team and to all of the great new experiences we’re going to be able to build together.”

About Facebook

Founded in 2004, Facebook’s mission is to make the world more open and connected. People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.

February 2012 U.S. Search Engine Rankings

comScore, Inc., a leader in measuring the digital world, today released its monthly comScore qSearch analysis of the U.S. search marketplace. Google Sites led the explicit core search market in February with 66.4 percent of search queries conducted.

U.S. Explicit Core Search

Google Sites led the U.S. explicit core search market in February with 66.4 percent market share (up 0.2 percentage points), followed by Microsoft Sites with 15.3 percent (up 0.1 percentage points) and Yahoo! Sites with 13.8 percent. Ask Network accounted for 3.0 percent of explicit core searches, followed by AOL, Inc. with 1.5 percent.

comScore Explicit Core Search Share Report*
February 2012 vs. January 2012
Total U.S. – Home & Work Locations
Source: comScore qSearch
Core Search Entity Explicit Core Search Share (%)
Jan-12 Feb-12 Point Change
Total Explicit Core Search 100.0% 100.0% N/A
Google Sites 66.2% 66.4% 0.2
Microsoft Sites 15.2% 15.3% 0.1
Yahoo! Sites 14.1% 13.8% -0.3
Ask Network 3.0% 3.0% 0.0
AOL, Inc. 1.6% 1.5% -0.1

*“Explicit Core Search” excludes contextually driven searches that do not
reflect specific user intent to interact with the search results.

17.6 billion explicit core searches were conducted in February, with Google Sites ranking first with 11.7 billion. Microsoft Sites ranked second with 2.7 billion searches, followed by Yahoo! Sites with 2.4 billion, Ask Network with 535 million (up 2 percent) and AOL, Inc. with 266 million.

comScore Explicit Core Search Query Report
February 2012 vs. January 2012
Total U.S. – Home & Work Locations
Source: comScore qSearch
Core Search Entity Explicit Core Search Queries (MM)
Jan-12 Feb-12 Percent Change
Total Explicit Core Search 17,804 17,588 -1%
Google Sites 11,786 11,673 -1%
Microsoft Sites 2,707 2,684 -1%
Yahoo! Sites 2,506 2,430 -3%
Ask Network 527 535 2%
AOL, Inc. 277 266 -4%

“Powered By” Reporting

In February, 68.6 percent of searches carried organic search results from Google (versus 68.4 percent in January) while 26.2 percent of searches were powered by Bing (versus 26.5 percent in January).

About comScore
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred source of digital business analytics. For more information, please visit www.comscore.com/companyinfo.