AOL announced yesterday that Microsoft has paid US$1.056 billion in cash for 800 of its patents, related patent applications, and a license that covers the 300 patents that AOL retains. In turn, AOL will license the patents being sold to Microsoft. While AOL’s stock price spiked as much as 45% upon the news, there was a lot of speculation about what the IP grab means to Microsoft.

“It is truly a staggering amount of money,” said Jon Hyland, shareholder at Munsch Hardt Kopf & Harr, a Texas-based law firm with several practice areas, including intellectual property. “That’s an average of about $1.4 million per patent,” he added.

A quick search of the U.S. Patent and Trade Office application database shows 303 AOL patent applications, although, for technical reasons, the number may not be correct. Assuming the number is correct and Microsoft is acquiring the rights to all 303 patents pending, then 800 granted patents plus 303 patent applications translates to just under $1 million per patent. Only AOL, Microsoft and insiders know exactly how many patents and patent applications are included in the deal.

To compare, a consortium including Apple, EMC, Ericsson, Microsoft, Research in Motion and Sony paid $4.5 billion for 6,000 Nortel patents. That’s $750,000 per patent. And Google purportedly initiated that auction with a $900 million bid.

Google, whose patent portfolio historically has been sparse for a company of its size and influence, recently acquired 24,500 patents from Motorola Mobility for $12.5 billion. Seventeen thousand of those patents were granted, and 7,500 were pending at the time of the announcement. That’s $510,000 per patent, granted or pending.

While a billion dollars may be nothing to Microsoft and the patents may be more than worth it, it would nevertheless take a lot of licenses to achieve breakeven ROI. As an example, the 11 licensing agreements with Android smartphone manufacturers are worth about $621.6 million for fiscal year 2012. Over the long term, however, the AOL patent acquisition will likely prove to be both profitable and wise.

According to AOL, the acquired patents cover advertising, search, content generation and management, social networking, mapping, multimedia and streaming, and security.

A number of high-stakes players, including Amazon, eBay, Facebook and Google, participated in the auction. The patent rights purportedly span current and former AOL businesses, including Netscape, ICQ, MapQuest, CompuServe, and others.