AOL has sold 800 patents to Microsoft for $1 billion. It is believed that the patents deal with various forms of Internet technology, including advertising, search and mapping, which would help Microsoft go up against Google in all of those areas.

“There is a fight for market share occurring on multiple fronts — technology, patents, advertising,” said Colin Gillis, an analyst with BGC Financial who covers Microsoft. “Microsoft, more so than others out there, has been (using) its patent portfolio as a way to generate license fees. This should strengthen that.”

AOL’s shares surged to their highest level in more than a year following the announcement, which will give AOL a license to the patents they sold. “The combined sale and licensing arrangement unlocks current dollar value for our shareholders and enables AOL to continue to aggressively execute on our strategy to create long-term shareholder value,” AOL Chairman and CEO Tim Armstrong said in a statement.

Source: AP {link no longer active}