Microsoft recently approached Pinterest regarding a potential takeover deal that would have amounted to one of Redmond’s largest ever acquisitions. Currently, the talks are not active, but the scale of the proposed merger further marks Microsoft’s plans for growth.
Microsoft Wants to Buy Pinterest
As reported by the Financial Times, Microsoft attempted to buy Pinterest, the world’s largest hobbyist pinboard.
Pinterest is currently valued at around $51 billion, and its market value has increased more than 600 percent throughout the COVID-19 pandemic as people head online during lockdowns. The prospective takeover deal news pushed Pinterest’s stock up 7 percent before the markets opened on Thursday 11 February.
The move would have brought Pinterest into Microsoft’s ever-growing stable of major tech acquisitions. In 2016, Microsoft acquired LinkedIn in a $26 billion deal, followed up by the purchase of Github for $7.5 billion in 2018.
That’s without mentioning that Microsoft owns Minecraft, purchased $2.5 billion in 2014, and the ongoing acquisition of major gaming holding company, ZeniMax, for $7.5 billion. ZeniMax is the parent company of such gaming studios as Bethesda Softworks, id Software, Alpha Dog Games, and Tango Gameworks.
Furthermore, there was a failed attempt to purchase TikTok’s North American, Australian, and New Zealand assets in mid-2020. The deal ultimately fell through but was valued between $20-30 billion and came after former-President Trump threatened to ban the video-sharing social network from the US entirely.
If the Pinterest deal had gone ahead, or indeed, if it finalizes at a later date, it will become Microsoft’s largest acquisition to date.
Why Is Microsoft Buying Up So Many Tech Companies?
Microsoft isn’t short of cash and wants to expand its empire. Its own stock has risen some 80 percent since the start of the COVID-19 pandemic and recently revealed its record-breaking profits.
The acquisition of another platform, like Pinterest, is a ticket to data for Microsoft’s other services. The sheer volume of data generated by platforms like LinkedIn is the perfect tool for training its AI technologies. Furthermore, taking on and managing an enormous online service like Pinterest also serves as an advert for its Azure platform.
As the Financial Times report also alludes to, the talk of such an enormous merger between two tech companies would put President Biden’s administration to the test, too. Is the new administration happy to allow tech giants such as Microsoft, Google, and Facebook to buy up the competition? Only time will tell.