America Online (AOL), once the titan of the internet, today said it would sell over 800 of its patents and related applications to Microsoft Corp, and grant the software giant a non-exclusive license to the patent portfolio it retains, for $1.56 billion in cash.

AOL said that it has received a license to the patents being sold to Microsoft.

The patent sale includes the sale of an AOL subsidiary, which AOL expects to record a capital loss for tax purposes.

AOL said that it would give a "significant portion" of the sale proceeds to its shareholders.

Following the sale, New York-based AOL will continue to hold a significant patent portfolio of over 300 patents and patent applications spanning core and strategic technologies, including advertising, search, content generation / management, social networking, mapping, multimedia / streaming, and security among others.

"The agreement with Microsoft represents the culmination of a robust auction process for our patent portfolio," said Tim Armstrong, AOL's chairman and CEO. "We continue to hold a valuable patent portfolio as highlighted by the license we entered into with Microsoft.''