Microsoft Strikes Patent Deal with Facebook amidst Rumours of Bing Selloff

by Matt Klassen on April 27, 2012

It was only two weeks ago that Microsoft struck a landmark sale and licensing deal with the once great Internet giant AOL, giving the former ownership of several hundred key AOL patents. Many thought the deal, worth around $1 billion, was a way for Microsoft to combat the growing threat of Google in many tech sectors, giving the PC giant yet another to assert control over the current tech market; the company having the assets to protect its new found intellectual property through legal channels should it need to.

But earlier this week Microsoft surprised everyone by turning around and striking another patent deal with Facebook, selling 70 percent of those same patents—some 650 in all—to the social networking behemoth for $550 million in cash, in addition to rights to 275 other AOL patents that Microsoft will retain (maybe).

As the New York Times reports, while this latest patent deal has numerous interesting subplots, none more so than the fact that two huge players are “teaming up to create a greater balance of power on the Internet — a market that has been tilted decisively in favor of one company, Google, for years,” a more clandestine agenda may lie just below the surface,that Microsoft may also be looking to offload its Bing search engine to Facebook as well.

For several months now voices from Wall Street, some shareholders, and it looks like some company executives as well have been calling for Microsoft to offload its Bing search engine, a service that many feel is only tangential to Microsoft’s core strengths and thus poses a distraction from the company’s central focus.

To that end, the NY Times report stated that anonymous Microsoft executives were even so bold as to put feelers out to gauge any interest in acquisition, asking Facebook, who is rumoured to be building its own search engine, if it was interested.

“Some executives within Microsoft have advocated selling Bing to another company, with the idea that a company better focused on the Internet market could pose a more credible challenge to Google, according to several people with knowledge of the discussions who didn’t want to be identified talking about internal deliberations.

Over a year ago, Microsoft executives sent out feelers to Facebook to see if the company would be interested in acquiring Bing, though the overture was not officially sanctioned by Steven A. Ballmer, chief executive of Microsoft, one of these people said.

“Mr. Zuckerberg declined, saying Facebook had too much else to concentrate on.”

The truth of the matter is, though, that Microsoft, on the surface at least, remains fully committed to Bing, with rumours abounding that among the patents it decided to keep in this latest deal with Facebook were the ones relating to search technology, offering the social network “patents involving mobile, Web and instant messaging technologies.”

In the end I will admit that much like Microsoft’s Windows Phone mobile OS, Bing seems incapable of growing into a true competitor for Google, at least in Microsoft’s hands. The PC giant simply lacks the corporate focus to effectively pursue such tangential technologies, meaning that perhaps if Microsoft was truly interested in wresting online dominance from Google it would be best served by selling Bing off to a company who would know how best to use it…a company like Facebook.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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