AOL Inc. agreed to sell more than 800 patents and related applications, along with a non-exclusive license to its remaining portfolio of patents, to Microsoft Corp. in a $1.056 billion deal.
The news sent AOL shares surging as the online media company said it intends to return a "significant portion" of the sale proceeds to shareholders. The deal comes as AOL has been feeling heat from shareholders.
Shares of AOL surged 35% to $24.90 in premarket trading, while Microsoft slid 0.8% to $31.28.
AOL recently has felt pressure from activist investor Starboard Value LP, which is mounting a proxy campaign to win seats on AOL's board. The investor has been critical of AOL's strategy of investing heavily in online-content businesses as a way of building up the company's ad sales.
AOL hasn't said exactly what the patents cover.