Microsoft’s most recent venture involved a staggering $51 billion offer to take over the well-known social media company Pinterest. Pinterest is a platform that lets users seek out different design inspirations via the uploading and sharing of images. As a platform that amasses around 175 million users per month, it is no surprise Microsoft had its eye on a firm with such a global reach.
However, it seems the multi-billion dollar deal was unsuccessful, with Pinterest rejecting the offer after expressing wishes to stay independent. This comes as no surprise when you consider the huge six-fold increase in Pinterest’s market value since the start of the pandemic. With business rising that way, it is no wonder Pinterest had no interest in Microsoft’s proposal.
Interestingly, this is not the first proposed takeover of a social media company where Microsoft has been snubbed. They failed to takeover TikTok in 2020 after no deal was reached concerning the handling of the platform in the US, Canada, Australia and New Zealand. Nevertheless, Microsoft may have dodged a bullet as the Biden administration announced it is putting a stop to the sale of TikTok’s US operations amid leftover tensions with China after a Trump presidency. Had a deal been reached with TikTok, Microsoft may have found themselves at the front of political chaos.
Despite two failed takeovers, Microsoft clearly aren’t giving up, as the battle between tech players continues. To stay competitive, these tech heavyweights must continue to grow and diversify into new sectors. Had they been successful with the acquisition, Microsoft would have gained access to large amounts of data from a new source - young people. This motive seems to match that behind the acquisition of LinkedIn for $26.2 billion in 2016. Tech giants need access to as much data as possible to effectively understand their customer base and help target products and advertisements.
While these billion-dollar companies are always on the lookout for firms to takeover, acquisitions have recently become harder after many debates over data handling ethics. The EU, in particular, has shown concern with just how much power firms like Google, Amazon and Microsoft have. For example, the EU is yet to approve a proposed merger between Google and Fitbit after concerns, enabling them to adopt anti-competitive behaviour. Google was prepared to splash out $2.1 billion for the purchase of Fitbit, with the aim of amassing even more data, but this time health data. The possession of such data would enable Google to personalise ads in a sector they are yet to dominate. However, Google had come under fire before it emerged that their shopping service was more likely to promote their own products, which was deemed unfair practice by regulators.
So while Microsoft got rejected by Pinterest this time, this won’t be the last we hear from them as they show no sign of slowing down. Pinterest just seems to be the latest target in a string of failed takeover bids. With all things considered, this is no real surprise as competition remains highly fierce between tech giants. This need to stay competitive through takeovers is clearly at the forefront of Microsoft’s growth strategy; it will be interesting to see who they pursue next.
While there will certainly be more high profile, high-cost acquisitions to come in the tech industry, the process will not be all plain sailing. All tech giants undoubtedly face an uphill battle against regulators before they can acquire as much personal data as they certainly want and need in order to stay at the top of their tech game.
Aggressive strategy here by Microsoft, good coverage.