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So what: The Internet pioneer is selling more than 800 patents to the software giant in a $1.1 billion deal, in addition to a nonexclusive license to the rest of its patent portfolio. The company also said it was planning on returning a large chunk of the proceeds to shareholders.
Now what: AOL investor Starboard Value has been calling for AOL to tap into its patent portfolio and estimated it could bring in roughly $1 billion. Many other analysts thought AOL's intellectual property was worth only $300 million, so the $1.1 billion price tag is a nice surprise for shareholders. CEO Tim Armstrong said the deal resulted from a "robust auction process" for its patents.
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