This morning AOL announced that it would sell or license about eleven hundred patents to Microsoft, in return for a billion dollars and change. Much of that money, AOL proclaims, will be passed to shareholders. The move is roughly akin to Warren Sapp selling off his massive collection of Air Jordans, or Jean Dujardin auctioning off his furniture in “The Artist.” Times are tough for AOL, and cranky collectors are banging at the door.

As Ken Auletta explained last year in a terrific profile of Tim Armstrong, the C.E.O. of AOL, the company has long been buoyed by the incredible fact that there are still lots of people who send in monthly checks, unaware that they no longer need AOL to connect to the Internet. Gradually, these people are dying off, or, with the help of their grandkids, figuring things out. AOL has known for a long time that it needs to find new revenue streams, but it has done so slowly. Activist shareholders have started complaining, and now, it seems, Armstrong has bought them off.

The move is depressing for several reasons. For starters, it reinforces just how litigious the technology industry has become. Yahoo is suing Facebook, and Facebook is suing back. Apple is suing everyone. Google just spent more than twelve billion dollars to buy Motorola Mobility, mainly so it could use those patents to defend itself when sued. “There is a lot of money going to lawyers and things, instead of building great products,” Google’s C.E.O, Larry Page, told Business Week in an interview last week.

AOL now reinforces the trend: by all indications, the money coming in will go to lawyers and things, and not to great products. The stock has unsurprisingly surged this morning because of the announcement of the shareholder payouts, and Armstrong himself has seen his assets increase by thirty million. But shouldn’t the money be used to invest in some new products, or in hiring engineers?

According to Auletta (and other accounts), Tim Armstrong is a very likable guy. And he believes in many things that are good for civic engagement, like AOL’s Patch, which pays for local reporting in communities across the country. But this move seems a bit desperate. Dispersing a massive wad of cash to shareholders is something to do when you’re filthy rich (like Apple) or when you’re scared and you’re worried that shareholders are going to start demanding things, like the removal of the C.E.O.

Photograph by David Paul Morris/Bloomberg/Getty Images.