Microsoft approached Pinterest with a potential deal, As per reports

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Microsoft approached Pinterest
Source: thestreet.com

According to the Financial Times reports, Microsoft approached Pinterest about a potential deal for a $51 billion social media company. But the talks are currently not active, said one of the people notified. If the deal had taken place, it would have been Microsoft’s biggest to date.

In recent times with increased virtual interactions that lead to an increment in the engagement on social media platforms benefited Pinterest as well. Pinterest informed that it made a record of 100 million monthly active users in 2020.

However, Pinterest whose market value has grown more than 600 percent recently, has signaled in the past that it would like to remain as an independent company. Pinterest generates revenue by placing advertisements next to the pins and posts. Which were uploaded on the site by users.

Microsoft approached Pinterest here are the details

One of the reasons Microsoft approached Pinterest will be that “Pinterest could signal an emerging strategy for bringing applications to Cloud platform. Microsoft always considered online communities as a way for bringing large scale applications to use its Azure cloud platform. Whereas Pinterest works on Amazon Web Services as its infrastructure provider.

Ownership of sites that have a high number of active users. Frequently engaging and posting has also provided valuable data for Microsoft’s other businesses. Such as Data from LinkedIn used for customizing other Microsoft services and apps, the network stated.

So, Microsoft approaching Pinterest also could be one of the reasons from Microsoft’s side. To convince more big online services to take advantage of its Azure Cloud. Because present Amazon’s AWS dominates most part of this market. In that case, Acquiring Pinterest will definitely draw some attention to Azure Cloud Platform and its users.

Another reason could be, A social media site such as Pinterest where millions of users upload images of various things they find interesting or might want to buy on boards can turn into an essential source of data for customers of Microsoft’s marketing services. At the same time, this same information can also act as raw material for training Microsoft’s AI systems.

Previously Microsoft tried to acquire TikTok

Same as the latest news Microsoft approached Pinterest, Previously also Microsoft made similar attempts with TikTok. As per reports, the key part of this TikTok deal will be the data and users that Microsoft gains access to. This is the driving force behind the concerns from the Trump administration over TikTok’s possible ties with the Chinese government. And how this data might be misused.

Microsoft acknowledges these privacy concerns in its blog post stating that “Microsoft will ensure that all the user’s private data of TikTok American users will be transferred to and will remain in the US itself”.

However, This data could be used by Microsoft in many ways. Previously Microsoft has long used Xbox Live to fuel parts of Microsoft Research. For software and hardware projects. Also, this usage data will help game developers and Microsoft to better understand how people will interact with their Xbox. By understanding how people interacted with Xbox and how they used the Kinect accessory for the Xbox. Which helped Microsoft to improve and develop HoloLens as well.

All this happened before Microsoft approached Pinterest, Because of acquiring TikTok. TikTok could help Microsoft in figuring out its blindspots and even influence how other software and services will be developed inside the company. The company has all the data it requires on business usage of software, but it didn’t succeed in customer services recently. This left the company with a lack of insight into consumer behavior. Unfortunately, this bid for TikTok has failed after the rival Oracle gatecrashed the talks.

Microsoft other acquisitions


After that also Microsoft made several acquisitions in recent years. This includes buying professional networking site LinkedIn for $26bn in 2016. After that, it acquired GitHub, a code depository platform that doubles as a network for software developers. Along with that Microsoft acquired Minecraft an online game that had passed 131m users.

Last year it acquired a private gaming company named ZeniMax for nearly $7.5 billion. By this we can say, Microsoft approached Pinterest with a deal of $51 billion will be Microsoft’s highest deal. Microsoft has seen online communities as a way to bring large-scale applications to its Azure Cloud Platform.

Microsoft approached Pinterest as it increased its advertiser base

Pinterest made its stock market debut in April 2019. In recent times it has seen users’ growth, as well as the platform, has shifted away from bricks and mortar stores to selling online. Last week Pinterest informed a 76 percent rise in quarterly revenues, raising its shares up more than 10 percent.

Also, Pinterest has increased its advertiser base. Introducing ad formats and eCommerce opportunities. Because of the nature of its content, this social network had avoided many issues faced by other social platforms over moderation failures.

However, if the deal is successful, it will be the largest deal ever for Microsoft. Then it would also have tested the Biden administration’s appetite for making powerful tech companies make deals. Whereas, Microsoft which mainly sells to businesses instead of consumers, has avoided most of the political backlash that made it more difficult for Facebook and Google in making big acquisitions.

Conclusion:

Microsoft approached Pinterest for a deal, according to the Financial Times. Microsoft made an acquisition of $51 billion in an attempt to acquire a social media firm. It would have been Microsoft’s biggest deal. However, The negotiations are not active, informed by the people. In the past, Pinterest indicated that it wants to remain independent.