Microsoft Spends $7.5m on IP Addresses

Microsoft has paid $7.5m for 666,624 IPv4 addresses that the bankrupt networking hardware vendor, Nortel Networks, had according to Delaware bankruptcy court documents.

That works out as $11.25 per address, more than you would pay for a .com domain name.

This is the first publicly disclosed sale of an IP address block since ICANN officially announced the diminution of IANA's free pool of IPv4 blocks last month.

Nortel's liquidation under US bankruptcy law has been going on since 2009. According to a court filing, "Because of the limited supply of IPv4 addresses, there is currently an opportunity to realize value from marketing the Internet Numbers, which opportunity will diminish over time as IPv6 addresses are more widely adopted."

80 companies were approached by Nortel about the sale a year ago and they eventually received four bids for the full block and three bids for a section of the portfolio - Microsoft's bid was the highest.

IP addresses are not typically viewed as an asset. However, this 'black market' for IP addresses has been anticipated for a while. IPv4 is no longer freely available, and there are risks and costs linked with upgrading to IPv6. The two protocols are expected to run alongside each other for years or decades.

At the press conference announcing the emptying of the IPv4 pool last month, Raul Echeberria, chair of ICANN's Number Resource Organisation, said "There is of course the possibility of IPv4 addresses being traded outside of the system, but I am very confident it will be a very small amount of IPv4 addresses compared to those transferred within the system. But it is of course a possibility this black market will exist, I'm not sure that it will be an important one. If the internet community moves to IPv6 adoption, the value of the IPv4 addresses will decrease in the future."

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