Microsoft's AOL Deal: A Billion-Dollar Assault on Google
Microsoft's spent $1.1 billion to buy 800 patents from AOL for a simple reason: To attack Google. Microsoft and Google are already locked in a series of lawsuits, notably over alleged patent infringements related to Android. The acquisition of these patents by Microsoft may signal an even nastier round of suits.
Among the patents that Microsoft bought are those related to the dearly departed Netscape browser, the browser which once ruled the world in the 1990s. Microsoft did everything it could to squash the Netscape browser back then. Many of those actions were at the core of the federal anti-trust suit against Microsoft. Lawsuit or no, though, Netscape bit the dust, and eventually ended up at AOL. The Netscape code base turned into Firefox, but AOL still held a variety of Netscape-related patents.
Those technologies are at the core of the Web. If it's true that Microsoft owns the patents to them, or to parts of the way they work, you can be sure that Microsoft will be using them to attack Google. Why else pay $1.1 billion?
Microsoft has already targeted Android, and as a result of threatened patent suits has been getting licensing fees from many Android device makers. In fact, last year, Citi analyst Walter Pritchard said that Microsoft was making more money from Android than from Windows Phone 7 because these suits, including one in which HTC pays Microsoft $5 for every device sold that uses Android.
As for Google, David Drummond, Google's Senior Vice President and Chief Legal Officer, wrote in a blog that there is "a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents."
If it's true that Microsoft now holds patents related to technologies at the core of the way the Web works, the Android lawsuits will seem like chump change compared to what's coming next. Think of it as Microsoft's nuclear option, and my guess is that they're willing to pull the trigger.