Microsoft reportedly attempted to acquire Pinterest. Talks were apparently in the advanced stage of negotiations but remain suspended in 2021. A similar story unfolded during TikTok’s acquisition as well.
A new report claims Microsoft approached Pinterest in a bid to acquire the social media platform. The talks aren’t active but had Microsoft acquired Pinterest, it would have been the company’s largest acquisition.
Microsoft would have had to pay more than $50 Billion in the Pinterest acquisition?
A Financial Times report claims Microsoft was committed to acquiring Pinterest. There are no specifics about the acquisition.
In other words, it is not clear how much money was Microsoft willing to pay for the image-based social media platform. However, current market capitalization values Pinterest at close to $51 Billion.
— Reuters (@Reuters) February 11, 2021
If the deal had gone through, buying Pinterest would have ended up being Microsoft’s largest deal yet. Currently, LinkedIn is Microsoft’s biggest acquisition.
The social media platform for professionals and job seekers cost Microsoft $26.2 Billion. It gave Microsoft access to more than 500 million LinkedIn users. There were several more backend and potential future benefits to acquiring LinkedIn.
Why did Microsoft attempt to acquire Pinterest and TikTok?
Although LinkedIn’s acquisition makes sense, going after Pinterest and TikTok doesn’t, at least for Microsoft. The company’s primary focus is business and productivity. Hence, social media platforms, no matter how lucrative, are out of Microsoft’s core area of business.
Although Microsoft may have failed in acquiring Pinterest, the company had a Pinterest integration for its Chromium-based Edge browser. If users give their consent, the Collections feature in Edge can recommend additional content from the social media platform.
At present, enabling the Collections feature means sharing collection names with a third-party company, which is Pinterest. Acquiring Pinterest would have ensured data and its benefits remain primarily with Microsoft.
Microsoft tried to acquire Pinterest, the FT reports. Microsoft seems to have an emerging M&A strategy around trying to get big names for Azure. Details: https://t.co/xOO6NMUiWF pic.twitter.com/5Tg53nU4FF
— Tom Warren (@tomwarren) February 11, 2021
Additionally, Microsoft could have integrated Pinterest features and functionalities within the Microsoft 365 apps. A simple example would be allowing MS Office users to add images from Pinterest to documents and presentations.
While these are mere speculations, the insanely high valuations of the social media platforms are a big dampener on Microsoft’s ambitions. Pinterest alone would have cost Microsoft upwards of $50 Billion.
While TikTok could have marked Microsoft’s foray into the mainstream world of social media, that deal appears to have fallen flat as well. Incidentally, the valuations of both these companies skyrocketed in 2020 owing to the lockdowns and home quarantine rules. Hence, Microsoft might have backtracked and let the talks about acquisitions fizzle out.