AOL just hired an investment bank to sell its patent portfolio.This is, quietly, a very smart move.
AOL has been around since the dawn of the Internet and has accumulated 800 patents over the years.
Most of those patents, presumably, are absurdly vague–such as the patents Yahoo is using to sue Facebook.
These patents include Yahoo’s claims that it invented the idea of customising a web site for each individual user and a means of using advertising to generate revenue for free web sites.
(Those are our paraphrases. But they’re what we took away from Yahoo’s patents.)
But if Yahoo has a chance of extorting money out of Facebook because it owns ridiculously vague patents like those, then AOL probably has a chance of extorting some money, too.
But companies, understandably, don’t like to be extorted. And the public doesn’t like extortionists. And it’s obvious to everyone who so much as glances at Yahoo’s Facebook lawsuit that, if Yahoo is actually able to get money for this, that Yahoo is being an extortionist and the patent system is completely broken.
So most people who have heard of Yahoo’s lawsuit think that the lawsuit and Yahoo are pathetic.
If AOL sued anyone for patent infringement, everyone would think AOL was pathetic, too.
And another PR headache is the last thing that AOL needs.
So how do you generate some value out of your patent portfolio without destroying your reputation in the process?
You sell the portfolio to someone else and let them do the extorting.
And that’s what AOL has decided to do.
A smart move by Tim Armstrong…
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