Microsoft has approached Pinterest in recent months about a possible deal to acquire the $ 51 billion social media company, popular with aficionados who publish decorative, food and wedding collages, informed people said.
Negotiations were not active at the moment, said one of the people informed. Microsoft has been pursuing an acquisition strategy with the aim of building up a portfolio of active online communities that can run on its cloud computing platform.
Pinterest, whose market value increased by more than 600% during the coronavirus pandemic, has signaled in the past that it wanted to remain an independent company.
The rise in stock prices would represent an obstacle for Microsoft, whose shares have risen almost 80% from a bearish pandemic, although Pinterest’s market value is only about 3% of Microsoft’s $ 1.83 trillion.
The purchase of Pinterest, which would be the biggest deal ever for Microsoft, would also test the Biden government’s appetite for allowing powerful technology companies to close deals.
However, Microsoft, which sells mainly to businesses and governments, rather than consumers, has largely avoided the political backlash that has made it harder for Facebook and Google to make major acquisitions.
Microsoft first revealed its interest in acquiring a major social media company last year when it tried to buy American operations from TikTok, a popular video app in China that was under pressure to divest its business in the United States due to to the Trump administration’s concerns about national security. The offer for TikTok failed after rival Oracle broke into the negotiations.
Microsoft has made several acquisitions in recent years. In addition to buying the professional networking site LinkedIn for $ 26 billion in 2016, it acquired GitHub, a code repository that functions as a network for software developers, and Minecraft, an online game that last year exceeded 131 million. users. Last year, it acquired the private gaming company ZeniMax for $ 7.5 billion.
Microsoft sought out online communities as a way to bring large-scale applications to its Azure cloud platform. Pinterest, which last week reported that its monthly users have grown to 459 million, relies on Amazon Web Services as its infrastructure provider.
Owning sites with a large number of active users, many of them posting frequently, has also provided valuable data for other Microsoft businesses. LinkedIn data, for example, is used to “customize” other Microsoft applications and services, the network said.
A social media site where millions of users post images of things that interest them or may want to buy on “boards” can become an important source of data for Microsoft marketing service customers, while also serving as a raw material. press for the training of the company AI Systems.
Pinterest, which debuted in the stock market in April 2019, benefited from an increase in usage related to the pandemic, as people stayed at home during the blocks and businesses switched from physical stores to online sales.
Last week, it recorded a 76% increase in quarterly revenues, causing its shares to rise 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 its rivals Facebook and TikTok.
Due to the nature of its content, the social network largely avoided the scrutiny faced by other platforms because of moderation flaws.
Microsoft and Pinterest declined to comment.