Unlike Apple, Microsoft Is Not Kidding Around

April 9, 2012

Well, AOL made headlines and some money. Navigate to “AOL Sells 800 Patents for $1 Billion to Microsoft.” I don’t think too much about AOL these days unless it is to wonder why the company is the doppelgänger of Yahoo. The passage in the TechCrunch write up which caught my attention was:

The sale to Microsoft came after a “competitive auction process” the company noted in a statement. It also includes the sale of the stock of an AOL subsidiary (unspecified which in the statement) “upon which AOL expects to record a capital loss for tax purposes and as a result, cash taxes in connection with the sale should be immaterial.”

Hmm. On the surface, the money looks good. Underneath I believe are roiling coils of management snakes. AOL is going to be added back on my watch list. There is more here than meets the eye. I find sales which are “immaterial” fascinating in today’s financial free for all.

As interesting as the surface of the deal appears, I think there is another message in this purchase of patents. Google believes that Steve Jobs was just kidding around and engaging in some harmless staff motivation when Mr. Jobs alleged vowed to rid the world of Android. I know I found that little more than a Bob Hope one liner.

Microsoft is not so friendly. My speculations include:

A ramped up legal move against Google. I am not sure where the attack will focus, but my hunch is that Android may be on the short list
More wheeling and dealing to get partners for various Microsoft projects. After all, a partner with a hunger for Microsoft patent assurances may find Redmond’s climate ideal
An IBM-type approach to intellectual property. IBM is a pretty savvy patent operator. Microsoft can borrow a couple of backyard plays and see if money flows in.

Google’s founders once loved AOL Instant Messenger. I wonder if that love will blind them to the difference between Steve Jobs’ kidding around and Microsoft’s more commercial interests.

Stephen E Arnold, April 9, 2012

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.