Facebook and Friend Microsoft Handshake over AOL Patents

Microsoft and Facebook announced on Monday, April 23, 2012, that Facebook is acquiring 650 patents from Microsoft, that the latter acquired earlier this month from AOL, for $550 million in cash. As part of this transaction, Facebook will obtain a license to the other AOL patents and patent applications being acquired by Microsoft and will grant Microsoft a license to the AOL patents and patent applications that it acquires. Bloomberg reported last week that Facebook had initially bid on the AOL patents but later lost out to Microsoft.

Microsoft had "Friended" Facebook years ago. First there was an ad revenue sharing agreement and then Bing started indexing public Facebook posts. Bing also became the go to search engine on Facebook. In October 2007, Microsoft reportedly edged out rivals such as Google to buy a 1.6% stake in Facebook for $240 million. It was a major vote of confidence and a valuation that at the time was called "astronomical" by the New York Times. At the time, Facebook trailed in size behind Myspace, and had revenue of only $150 million annually. Microsoft's stake is now valued at an estimated $1 billion plus.

Facebook founder Mark Zuckerberg, like Bill Gates, dropped out of Harvard to found his company. In 2010, Zuckerberg joined Microsoft's Bill Gates and Warren Buffett in signing the "Giving Pledge," a commitment to give away a majority of his fortune.

ZDNet's Emil Protalinski's been following the Microsoft Facebook friendship for some time now.

But the AOL patents deal may be about rivals, even though it is among friends. For example, PC World suggested the reason Microsoft paid a rich premium valuation for the AOL patents in the first place was to go on the offensive with Google for the 265 patents that were of strategic importance to it. Although patent research firm Envision IP calculated that only 29 of the AOL patents related to social media, Facebook, which is currently in a bitter public patent dispute with Yahoo ahead of its IPO, may have gone on the offensive to strengthen its intellectual property (IP) fortress.Yahoo responded to Facebook's AOL patent acquisition with its own take, which ZD Net published.

According to TechCrunch, which is owned by AOL, Facebook started 2012 with only 56 patents. Since then, it has acquired 750 patents from IBM for $83 million (according to its amended registration statement), patents related to the Instagram acquisition, and now 650 patents from AOL for $550 million. This brings the total patents owned by Facebook to 1400, and it has another 600 patents pending globally.

Related news: Facebook May Have Bid on AOL Patents

Did Spat with Yahoo Prompt Facebook to Bid on AOL patents?

What might have prompted Facebook, which filed to go public in February, to make an unsolicited bid for the AOL patent portfolio? AOL's 29 patents that could be applied to social networking systems?

Co-incidentally on March 12, Yahoo! filed lawsuit against Facebook in the U.S. District Court for the Northern District of California alleging "Facebook's entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo's patented social networking technology." New York Times reported that Yahoo! has threatened Facebook with “10 to 20″ of its patents, purportedly related to “Facebook’s ads, privacy controls, news feeds and messaging service.” Facebook countersued Yahoo! on April 3 in a the U.S. District Court in San Francisco. Less than a week later, after it reportedly lost out on the AOL patent bid, and on the same day Microsoft unveiled the AOL deal, Facebook, said it is buying Instagram photo-sharing for $1 billion.
If Microsoft intends to sell most of the non-core patents it acquired from AOL, and Facebook is still interested, the second time might be the charm for Facebook's bid at AOL's patents.


More on Yahoo! News here: Facebook May Have Bid on AOL Patents

Starbucks Drops Beetle Derived Red Cochineal Extract

Outrage had broken out in late March and early April, when Starbucks confirmed it was using boiled and crushed beetle scales, called carmine or cochineal natural food coloring to color its strawberry frappucinos pink.

On Thursday, April 19, Starbuck's U.S. president, Cliff Burrows, said that "after a thorough, yet fastidious, evaluation, I am pleased to report that we are reformulating the affected products to assure the highest quality possible," using a tomato-based extract called lycopene.

However, the company needs two months to "fully transition" to the new products across the U.S., meaning your favorite fraps won't be bug juice free until the end of June. A brief article appeared on the Wall Street Journal, citing the change.

Burrows disclosed on the Starbucks blog that drinks that used cochineal beetle scales included Strawberries and Crème Frappuccino® blended beverage, and Strawberry Banana Smoothie. In addition, cochineal extract was used food offerings such as Raspberry Swirl Cake, Birthday Cake Pop, Mini Donut with pink icing, and Red Velvet Whoopie Pie.

So now your milk-based strawberry frap will don a tomato cape and fight prostrate cancer! PR brownie points?

If past is any indication, Starbucks may have a lawsuit brewing. McDonald's Corp. agreed to donate $10 million to Hindu and other groups to settle lawsuits filed in 2001 against the chain for mislabeling french fries and hash browns as vegetarian, when in fact it had been cooking them in beef extract.

Here is my earlier blog on the subject:

Say No to Foods Laced with Carmine (Beetle Juice)!

http://moneymatters-dalia.blogspot.com/2012/03/say-no-to-foods-laced-with-carmine.html

Penny Wise, Dollar Foolish - When the Urge to Save Goes Too Far

 Have you been penny wise, dollar foolish? I know I have!

Sometimes an attempt to squeeze pennies in savings goes a bit too far and instead becomes a waste of time and money. Here are some cautionary tales.

I Saved Almost $6,100 a Year by Not Owning a Car

$4 gas making you cringe? Me too. Here I recall the days I did not have a car. By not owning or driving a car, and by using a combination of public transportation and taxicabs, I saved almost $6,100 annually. A breakdown of my savings by cost of ownership, parking and operating an automobile. Read the story here...

The Best Credit Card for Foreign Travel

Planning a late spring break getaway or making summer travel plans?
If you are planning international travel, give this article a read! Packing the right credit card for foreign travel saved me a bundle. Read more here...

How to reduce risk of fraud and other credit card lessons I have learned

courtesy: sxc.hu/lotushead

The Global Payments credit card data breach has surpassed 1.5 million. While this may not have been entirely preventable, now may be a good time to revisit my article on credit card fraud prevention and other useful tips about managing my credit cards. Read more HERE...

How I Save on Prescription and OTC Medications



Copyright: personalfx/sxc.hu

 Americans incur out-of-pocket medical costs averaging nearly $4,400 per year. Even for those without chronic conditions, cost of medications for even minor ailments such as cough, cold, heartburn and allergies can add up. Here are some ways I save 10-33% on  prescription and OTC medication costs. Read more HERE...

A Bit of Crayon Cost us $1527!

Courtesy: SXC.HU

It is no April Fool's joke!

Unexpected medical costs can strike anytime. Even a little bit of crayon can blow your budget and cause financial strain, in addition to mental and physical trauma. In our case, it cost $1527 in unexpected medical costs, for us and our insurance company. Read more here...

Where Can I Save My Cash?

Investors are holding more of their portfolio in cash amidst the global market turmoil. Meanwhile, interest rates on savings and checking accounts have decreased. Here are some of my novel, and not so novel places to get a higher return for holding cash. Read more HERE.

 

 

Disclaimer: All content is personal opinion and not a solicitation or recommendation to invest in any securities or services. Dalia is not affiliated with any financial company or broker dealer, as such she does not maintain her Series 7, 63, 86 and 87 securities licenses. She is also not an investment adviser, financial planner, CPA or tax attorney. Information provided is deemed to be accurate, but we do not assume any liability for services rendered or information provided.