Microsoft has approached Pinterest in recent months about a possible deal to acquire the $ 51 billion social media business that is popular among hobbies who post household decor, food and wedding collages, people said.
The talks were currently not active, one of the people said. Microsoft has pursued an acquisition strategy aimed at amassing a portfolio of active online communities that can be used on top of its cloud computing platform.
Pinterest, whose market value increased by more than 600 percent during the coronavirus pandemic, has indicated in the past that it wants to remain an independent company.
Its rising share price will provide an obstacle for Microsoft, whose shares have risen nearly 80 percent from a pandemic low, although Pinterest’s market value is only about 3 percent of Microsoft’s $ 1.83 tons.
Pinterest shares rose just over 5 percent on Thursday morning.
A purchase of Pinterest, which would be the largest transaction ever for Microsoft, would also have tested the Biden government’s appetite for allowing powerful technology companies to enter into transactions.
Microsoft, which sells primarily to businesses and governments rather than consumers, has avoided most of the political setbacks that have made it harder for Facebook and Google to make big acquisitions.
Microsoft first revealed its interest in acquiring a prominent social media company last year when it sought to buy the US operations of TikTok, a popular Chinese video app that was under pressure to sell its US business over the Trump administration’s national security. The bid for TikTok failed after rival Oracle hampered the talks.
Microsoft has made several acquisitions over the past few years. In addition to acquiring the professional networking site LinkedIn for $ 26 billion in 2016, he has GitHub, a code repository that also serves as a network for software developers, and Minecraft, an online game that had 131 million users last year. overtaken, acquired. Last year, he acquired the private gaming company ZeniMax for $ 7.5 billion.
Microsoft has looked at online communities as a way to bring large-scale applications to its Azure cloud platform. Pinterest, which last week said it had grown to 459 million monthly users, relies on Amazon Web Services as its infrastructure provider.
Website ownership with a large number of active users, many of whom post frequently, has also provided valuable data for Microsoft’s other businesses. LinkedIn data, for example, is used to “customize” other Microsoft programs and services, the network said.
A social media site where millions of users post images of things they are interested in or want to buy on ‘boards’ can become a major source of data for customers of Microsoft’s marketing services, while also serving as raw material for training of the enterprise. AI systems.
Pinterest, which made its stock market debut in April 2019, has benefited from a pandemic-related increase in usage as people stayed home during locks and changed business from bricks and mortar stores to online sales.
Last week, quarterly revenue rose 76 percent, pushing its shares up more than ten percent. It has expanded its advertiser base and introduced ad formats and e-commerce opportunities that bring it in line with similar developments at competitors Facebook and TikTok.
Due to the nature of its content, the social network has largely avoided the investigation that other platforms face due to moderation errors.
Microsoft and Pinterest declined to comment.