Pinterest is a well-used site that allows users to post pictures of food, celebrations, and anything else that interests them. It was recently the subject of an attempted takeover by Microsoft. Valued at $51bn, it is clear that Microsoft must admire it to be prepared to pay so much. During the pandemic, Pinterest has seen a massive increase in its market value. It is believed it could be as much as 600%. For this reason, it is clear why Microsoft get spinia into their portfolio.
Despite the rise and the phenomenal amount of money Microsoft would pay, Pinterest has not been bought. It has in the past stated that it wanted to stay as an independent company. The desire not to be bought and the immense increase in value will stand in Microsoft’s way at present. Points in favour are the 80% increase in their value and the overall difference in the two companies’ value. They could surely increase any recent purchase prices mentioned.
A big deal – in more ways than one
If the deal were to go ahead, it would be the largest takeover Microsoft has been a part of. It would also be a big deal politically. It would raise questions at the Whitehouse and leave Joe Biden in a quandary over the tech giants’ growth. Their saving grace could be that they are more a seller to business than consumers and allow them to avoid Google and Facebook’s criticism.
The interest in Pinterest is the latest in a long line of acquisitions for Microsoft. Recently they have purchased LinkedIn, GitHub, and Minecraft. They are at risk of criticism if they buy up too much, so they need to consider who they try to take over carefully.
Why Pinterest now?
Microsoft wants to increase the usage of its Azure cloud platform, and online communities are an ideal way to do this. As Pinterest has more than 450m users, it would also be an ideal source of data. Once in possession of this, Microsoft could use it for the benefit of their other arms. It is the market service that would clearly gain in this instance. With people posting what they are interested in and what they would like to buy, the marketing service could make a killing.
They could take advantage of the increase in people choosing to buy online due to the restrictions on travelling to physical stores. Seeing Pinterest shares leap by 10% on the stock market and changing the way it advertises, it moves closer to sites such as Facebook. Due to the way the posts appear, there are fewer concerns about breaches of protocol that tarnish TikTok and Facebook, making it seem like a safe purchase.
State of play
According to an employee who has been involved in the project, there are presently no discussions taking place. It does not mean that Microsoft is no longer interested, just that for now, the takeover is not imminent.