Facebook Spent $24 Million On Acqui-hires, $633 Million On Patents During The First Half Of 2012

Facebook has become known for making a good number of talent-focused startup acquisitions, aka acqui-hires — but the cost of each deal is normally kept under wraps. In a regulatory quarterly filing the company made today with the Securities and Exchange Commission, though, it put an aggregate pricetag on all those “non-material” sized deals it made in the first half of this year: $24 million.

Here’s the wording from the document:

“During the six months ended June 30, 2012, we completed business acquisitions for total consideration of $24 million. These acquisitions were not material to our condensed consolidated financial statements individually or in the aggregate.”

From January through the end of June, Facebook made six acquisitions, two of which — Instagram and Face.com — were of material size. That leaves Tagtile, Glancee, Lightbox, and Karma as the buys on which Facebook spent $24 million total.

It bears mention that this does not mean that there was a $24 million cap on what the founders of these startups received as part of their decision to join Facebook. Salaries, bonuses, individual stock grants to employees, and the like are not included in this figure.

Facebook also issued new shares of its stock pursuant to some acquisitions, the filing said — 40,000 shares of Class A stock were issued on the day of the Tagtile buy, 36,828 Class A shares were issued the day of the Glancee buy, and 1,099,986 shares were issued the day of the Karma buy.

Here’s the breakdown of where that money went (click to enlarge):

And the bit about the stock issued (click to enlarge):


The patent and IP pricetag

Facebook also broke out the exact amount of money it spent on acquiring patents and IP, that it was pretty significant: $633 million. The bulk of that — $550 million — went to its purchase of hundreds of AOL patents from Microsoft. Facebook spent $83 million total buying 750 patents from IBM . The remainder was spread across other deals. The company detailed the spending in the document like this:

“During the six months ended June 30, 2012, we acquired $633 million of patents and other intellectual property rights. We completed the largest of these acquisitions in June 2012 under an agreement with Microsoft Corporation pursuant to which we were assigned Microsoft’s rights to acquire approximately 615 U.S. patents and patent applications and their foreign counterparts, consisting of approximately 170 foreign patents and patent applications, that were subject to an agreement between AOL Inc. and Microsoft entered into on April 5, 2012. We paid $550 million in cash in exchange for these patents and patent applications.”

Josh Constine contributed reporting to this article.