Facebook will pay Microsoft Corp $550 million for hundreds of patents that originated with AOL, beefing up its intellectual property arsenal. The deal gives the world's No.1 social networking company 650 patents and patent applications and license to another 275 patents and applications. It comes shortly before Facebook is expected to have the largest initial public offering in Silicon Valley history. Patents have become a top priority for technology companies as many of them, including Google Inc and Apple Inc , become embroiled in patent-related lawsuits. The patents, which Microsoft bought this year from AOL, cover a broad spectrum of technology, including mobile services, cell phone handsets, advertising and e-commerce, a source familiar with the situation said. Microsoft trumped Amazon, eBay and other tech companies this month with its more than $1 billion purchase of most of AOL's patent trove. Valuing patents is a complex process, and it was not immediately clear whether Microsoft profited from the deal with Facebook. Microsoft bought the AOL patent portfolio knowing that it was an all-or-nothing deal and always planned to sell a large number of them while retaining licenses to them, a source close to the Facebook deal said. Microsoft will retain a license to the patents and applications it is selling to Facebook under the terms of the deal. The purchase marks Facebook's second recent move to bolster its patent portfolio, which consisted of 56 issued patents and 503 applications as of December 31, according to a filing with the US Securities and Exchange Commission. In March, it acquired 750 patents from International Business Machines Corp. — Alexei Oreskovic and Diane Bartz, Reuters __
