According to the Financial Times, Microsoft recently approached the US based image sharing and social media service, Pinterest, looking to purchase the company for $51 billion. According to sources, the negotiations are not active. Pinterest has previously hinted in the past that it would like to remain independent. Had the deal gone ahead, it would have been the software giant’s most costly acquisition to date, seconded only by its purchase of LinkedIn in 2016 for $26 billion.
It's All About Azure
As it stands, Microsoft’s acquisition strategy is focused on ‘collecting’ a range of online platforms, which can then be migrated onto Microsoft’s own cloud computing platform, Azure, if they're not already hosted there. The technology giant’s push for Pinterest is thought to signal the company’s drive for a greater share of the market. As it stands, Amazon Web Services (AWS) dominates 1/3 of the cloud hosting market. By welcoming big names like Pinterest into the Azure fold, Microsoft is primed to attract increasing numbers of customers and boost its share of the market.
The software giant also approached the popular Chinese social media platform TikTok in 2020, with an offer to purchase the company. Had the deal been successful, TikTok would have served as an ideal outlet for the myriad of other Microsoft services, whilst encouraging prospective customers to opt for Azure rather than AWS. Under its current CEO Satya Nadella, Microsoft has acquired some significant companies. Github joined the software giant for $7.5 billion a few years ago, and Microsoft is also in the final stages of finalising its Bethesda acquisition, valued at $7.5 billion.
But Why Pinterest?
Pinterest currently boasts 320 million active users- a figure that’s rapidly increased throughout the course of the pandemic and continues to do so. Moreover, the platform’s market value increased by over 600% during 2020, with Pinterest revealing that it’s added over 100 million new users to its system during the timeframe, and even saw a 76% growth in year-or-year quarterly revenue. The platform would have placed Microsoft in the ideal position to boost Azure's appeal, and subsequently, its share of the market.
Sources: https://www.theverge.com/2021/2/11/22277845/microsoft-pinterest-acquisition-azure-cloud-services-rumors , https://markets.businessinsider.com/news/stocks/pinterest-stock-price-report-microsoft-tried-to-buy-billion-platform-2021-2-1030072236 , https://www.forbes.com/sites/carlypage/2021/02/11/microsoft-reportedly-tried-to-buy-pinterest-for-51-billion/?sh=2cdf2dea595c