Strength of AOL’s $1B patent porfolio lies in fundamental communication tech

AOL CEO Tim Armstrong’s claims of the company’s patent library being worth an estimated $1 billion might prove true, according to patent research firm Envision IP.

AOL has struggled over the past few years to transition itself from relying primarily on dial-up internet service subscriptions to an advertising/media powerhouse. The company’s overall revenue is down sharply compared to two years ago, and activist investors are questioning Armstrong’s strategy for some of its news publications, like the local-news hub Patch. Because of this, Armstrong felt it necessary to start promoting AOL’s patent portfolio as a way to generate more money.

Armstrong claims that AOL has about 800 patents that are very important, half of which are essential for internet users. Envision IP thinks a fifth of the company’s valuable patents are related to online messaging.

“Many of these patents relate to fundamental online communication technologies, stemming from AOL’s early dominance in the instant messaging and email markets,” writes Envision IP in its assessment of AOL’s portfolio. The company also has a large number of early patents for webpage rendering, search engine technologies, and multimedia compression/transmission.

“While AOL does not seem to have any patents that could be deemed essential to wireless standards, it certainly owns many technologies that are fundamental to electronic and voice messaging, Internet user experience, multimedia sharing, and web-based data retrieval, technologies that have become common place in today’s online world,” the firm writes.

It’s interesting that AOL recently laid off a chunk of employees from its e-mail and messaging services department. Perhaps the company is much less interested in maintaining those services as it is licensing off the technology behind them for a greater profit.

Via AllThingsD