Microsoft approached Pinterest in recent months about a possible deal to acquire the $ 51 billion social media company popular with hobbyists posting home decor, food and wedding collages, according to people who had been briefed.
The talks were not currently active, one of the people who was informed said. Microsoft has pursued an acquisition strategy aimed at amassing a portfolio of active online communities that can run on top of its cloud computing platform.
Pinterest, whose market value rose by more than 600 percent during the coronavirus pandemic, has indicated in the past that it wants to remain an independent company.
The surging stock price would be a hurdle for Microsoft, whose shares are up nearly 80 percent from a pandemic low, even though Pinterest’s market value is only about 3 percent of Microsoft’s $ 1.83 trillion.
Pinterest shares were up a little more than 5 percent early in trading Thursday morning.
A purchase of Pinterest, which would have been the biggest deal ever for Microsoft, would also have tested the Biden government’s willingness to allow powerful tech companies to make deals.
Microsoft, which primarily sells to businesses and governments rather than consumers, has largely avoided the political backlash that has made it more difficult for Facebook and Google to make major acquisitions.
Microsoft first announced last year that it was interested in acquiring a prominent social media company when it attempted to buy the US operations of TikTok, a popular Chinese video app that was under pressure to divest its US operations due to the Trump administration’s concerns about national security. The offer for TikTok failed after rival Oracle cut off 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 doubles as a network for software developers, and Minecraft, an online game that passed 131 million users last year. Last year, the private gaming company bought ZeniMax for $ 7.5 billion.
Microsoft has looked to online communities as a way to bring large-scale applications to its Azure cloud platform. Pinterest, which said last week that its monthly users had grown to 459 million, relies on Amazon Web Services as its infrastructure provider.
Owning sites with a large number of active users, many of whom post regularly, has also provided valuable data for Microsoft’s other companies. For example, data from LinkedIn is used to customize other Microsoft apps and services, the network said.
A social media site where millions of users post images of things they are interested in or might want to buy on boards can become an important source of data for Microsoft’s marketing services customers, while also serving as a raw material for training the company AI systems.
Pinterest, which made its stock market debut in April 2019, benefited from a pandemic-related increase in usage as people stayed home during lockdowns and the business shifted from brick-and-mortar to online sales.
Last week, it posted a 76 percent increase in quarterly earnings, pushing its shares up more than 10 percent. It has broadened its advertiser base by introducing ad formats and e-commerce capabilities that bring it in line with similar developments at rivals Facebook and TikTok.
Due to the nature of the content, the social network has largely avoided the control of other platforms for moderation failure.
Microsoft and Pinterest declined to comment.