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Microsoft has approached Pinterest in recent months about a potential deal to acquire the $ 51 billion social media company popular with enthusiasts who post home decor, food and wedding collages, people briefed at the office said. topic.
Talks were currently not active, one of the people briefed said. Microsoft pursued an acquisition strategy aimed at building a portfolio of active online communities that could run on its cloud computing platform.
Pinterest, whose market value increased by more than 600% during the coronavirus pandemic, has indicated in the past that it wants to remain an independent business.
The surge in its stock price would represent a hurdle for Microsoft, whose shares have risen nearly 80% from a pandemic, although Pinterest’s market value is only about 3% of the $ 1.83 billion in Microsoft.
A purchase of Pinterest, which would have represented the biggest deal ever for Microsoft, would also have tested the appetite of the Biden administration to allow powerful tech companies to close deals.
However, Microsoft, which sells primarily to businesses and governments rather than consumers, has avoided most of the political backlash that has made it harder for Facebook and Google to make big acquisitions.
Microsoft first revealed its interest in acquiring a leading social media company last year when it attempted to buy the US operations of TikTok, a popular Chinese video app that was under pressure to divest its US business due to of the Trump administration’s national security concerns. The offer for TikTok fell through after rival Oracle failed talks.
Microsoft has made several acquisitions in recent years. In addition to buying professional networking site LinkedIn for $ 26 billion in 2016, it acquired GitHub, a code repository that also serves as a network for software developers, and Minecraft, an online game that has surpassed it. 131 million users last year. Last year it acquired privately-held games company ZeniMax for $ 7.5 billion.
Microsoft has turned to online communities as a way to bring large-scale applications to its Azure cloud platform. Pinterest, which last week said its monthly users rose to 459 million, relies on Amazon Web Services as an infrastructure provider.
Ownership of sites with a large number of active users, many of whom post frequently, has also provided valuable data for other Microsoft companies. Data from LinkedIn, for example, is used to “personalize” other Microsoft applications and services, the network said.
A social media site where millions of users post pictures of things they are interested in or might want to buy on “boards” could become an important source of data for Microsoft’s marketing customers, while also serving as material. first for the formation of the AI Systems company.
Pinterest, which debuted on the stock exchange in April 2019, has benefited from an increase in usage linked to the pandemic as people have stayed at home during lockdowns and businesses have moved from physical stores to selling in line.
Last week it posted a 76% increase in quarterly earnings, pushing its shares up more than 10%. It has broadened its advertiser base, introducing ad formats and e-commerce opportunities that bring it in line with similar developments at rivals Facebook and TikTok.
Due to the nature of its content, the social network has largely avoided the scrutiny other platforms face over moderation failures.
Microsoft and Pinterest declined to comment.
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