What happened
Actions of Pinterest (NYSE: PINS) rose 7.3% on Thursday in reports with which it held negotiations with Microsoft (NASDAQ: MSFT) in relation to a potential acquisition.
And
Microsoft approached Pinterest about a possible deal, according to The Financial Times, although negotiations are no longer active. Pinterest’s stock price has soared 32% so far in 2021 and 258% last year, which probably made it difficult for the two companies to agree on a price. Critics have criticized Microsoft for overpaying for acquisitions in the past, and the tech giant does not want to repeat those mistakes.
Microsoft was reportedly tempted by the growing growth of Pinterest users. Image source: Getty Images.
In addition, the business would undoubtedly face regulatory scrutiny. Many government officials have expressed concern about the growing power of large technology companies, especially with regard to their ability to influence public opinion through social media.
What now
It’s easy to see why Microsoft would be interested in Pinterest. The popular image-sharing website added more than 100 million active users in 2020. People migrated to its platform during the coronavirus pandemic to find inspiration in images related to their passions. Pinterest’s revenue, in turn, increased 48% year-over-year to $ 1.7 billion.
Microsoft, meanwhile, is looking for rapidly expanding social media sites that can help drive the growth of its Azure cloud computing service. Pinterest currently uses Amazon Web Services for its cloud infrastructure needs.