Springhill Group Home : Facebook Buys 650 AOL Patents

Facebook is set to pay Microsoft USD 550 million for 650 patents recently auctioned by AOL in its effort to boost its IP for the looming litigation against Yahoo.

Under pressure from its stockholders to make changes to prevent further revenue fall, AOL was obliged to sell and license over 800 patents to Microsoft on April 9. It would retain over 300 applications and patents after the auction.

Aside from the 800 patents bought by Microsoft, AOL will also give them license to 300 patents it has retained for a tag of USD 1.056 billion. Thus, Microsoft ultimately acquired 925 AOL patent applications and patents, 650 of which will go to Facebook. The 2 firms has also agreed to license their patent holdings to each other.

It is not yet clear what technologies Facebook has acquired rights to or those that has remained with Microsoft. But considering that the legal battle with Yahoo concerns messaging, social networking, etc, it looks like Facebook would want to have ammunition of its own.

According to a statement from Springhill Group Home, the deal with Facebook has allowed Microsoft to at least recoup more than half of its costs while accomplishing its goals from the auction of AOL. However, it cannot be readily said that Microsoft has really profited from the agreement as patent valuing is a complicated process.

Microsoft has a relatively long history of close relationship with the social network giant. In 2007, it has invested USD 240 million in  Facebook, giving it a 1.6% stake. Since then, the 2 firms have had collaborations like Microsoft’s Bing search and search ad technologies being used on Facebook. Its video chat technology also comes from Microsoft as it has acquired Skype last year.

On the other hand, Microsoft also has a close business relationship with Yahoo as Bing powers their advertising and search engine. Yahoo has filed a lawsuit against Facebook for allegedly infringing 10 of its patents covering online ad technology. Facebook then countersued Yahoo for allegedly infringing 10 of its own patents.

“Nothing about today’s action changes the fact that Facebook continues to infringe our patents. Companies who purchase patents are often working from a position of weakness and take these actions to strengthen their portfolio. We see today’s announcement as a validation of our case against Facebook,” said Yahoo in a statement to Springhill Group Home.

This acquisition is the second-largest purchase by Facebook, following the USD 1 billion takeover of Instagram. It has also bought 750 patents of IBM in March.

Georgelas-Cherner deal falls apart

By Jonathan O'Connell, Published: April 29

Ownership of the most prominent development project in Tysons Corner splintered recently after a deal between two of its principals — the Cherner family of auto dealers and developer Aaron Georgelas — fell through.

The Cherners agreed to a contract with Georgelas in 2006 that would allow the family’s auto dealerships to be included in the Tysons developer’s plans for a 6 million-square-foot high-rise development at the corner of Leesburg Pike and Spring Hill Road. The two since worked side-by-side to argue for county development rules that would permit an urban Tysons Corner and to integrate their properties.

But the Cherners and Georgelas failed to extend their contact in recent weeks, raising the possibility that the development, which Fairfax Countyselected as its demonstration projectfor new Tysons zoning rules, could be developed piecemeal.

The Georgelas and Cherner families have both run businesses in Tysons Corner since the 1960s. Including the five Cherner dealership properties, Georgelas had amassed 28 acres around the coming Tysons West Metrorail station and planned a total of 18 buildings. He was first to receive approvals under Tysons new zoning rules and inked a deal with Greystarto purchase land for a 25-story, 400-unit apartment tower now under construction.

But the Cherner properties are closest to the Metro station, set to open in late 2013. Without them Georgelas is left with a U-shaped footprint that circles a seven-acre, Cherner-owned core.

Jonathan Cherner, who runs Cherner Automotive Group with his brother Andrew, said the contract offered an opportunity to purchase the dealership land. “They had an option to buy the property, and they allowed that option to expire,” he said. “It’s as simple as that.”

“I think the world fundamentally changed several years ago [with the economic collapse], and I think it fundamentally changed for many industries, and the development industry was certainly one of them,” he said.

Cherner is considering partnering with another developer or buyer, or moving through zoning independently. He said his priority was getting the Cherner and Georgelas properties zoned cohesively. “I think it’s just important that they all move through in a cohesive manner so that a common vision is achieved. We continue to be really bullish on the demonstration project and the vision that the county and Aaron have helped design,” he said.

Aaron Georgelas said he hoped the deal could be revived but declined to elaborate. Cherner said he would not rule out working with Georgelas in the future. “We know and they know that we’re still very much linked at the hips because of our properties,” he said.

The county will continue to focus on the project despite its fractured ownership, said Barbara Byron, director of the county’s Office of Community Revitalization and Reinvestment. “Ideally, we do want the consolidations and I think that helps in terms of the development of Tysons,” she said. “But we also understand that there are also difficulties with effectuating them, and while it’s unfortunate we understand it and we’re trying to work both the Georgelas and the Cherner piece, while independently, within an overall concept.”