It looks like Microsoft wants to become a huge social media company without going directly into building its own. If it wanted to, it shouldn’t be a big deal for the biggest software company in the world. Microsoft owns business social platform Yammer, bought professional social media site LinkedIn for $26b and then even attempted to buy TikTok last year when the Trump administration was trying to force the Chinese social media to sell or partner with an American company.
According to the Financial Times, Microsoft was in talks to buy Pinterest, a $51b social interest company. Pinterest is now big and yes it added many subscribers throughout the pandemic period growing 37 percent to 459 million monthly active users, bigger than Twitter in user base. They added 100 million new subscribers and this along with increased advert revenue saw their share price grow three fold.
The article notes though that the talks are no longer on, but the fact that it happened mean Microsoft could come calling again. The move underscore the importance of social media in our world and Microsoft which was an early Facebook investor wants to be a big player in that area. Some experts predicted that LinkedIn could become another Lumia but that hasn’t happened since Microsoft acquired them in 2016. LinkedIn now has 722 million members, they experience a 31 percent growth in the pandemic time. 40 million people use LinkedIn to search for jobs each week and usage is only projected to grow as the platform adopts more regular social media looks like Stories. Microsoft has focused on Cloud services and has sought to sell to users on a professional network like LinkedIn.
While it is interesting that Microsoft is looking to expand its social media portfolio, the big risk for them is that they could start coming under the antitrust hammer from Europe and America. Big and diverse social media and internet companies are all facing some kind of a antitrust claim of their own and Microsoft could soon join Apple, Google, Facebook and Amazon in that space. The good part is that this could make Microsoft one of the most diverse companies in the world because if the acquisition ever happens in future, Microsoft would eventually try and synchronize some features of Pinterest and LinkedIn in future and that could be big.
But Microsoft is not new to the social media space. MSN Messenger had about 350 million users before it was discontinued. The other big flop is Skype which could have dominated in the lock down period like Zoom and Google Meet. But how Microsoft bought that company for $7b and drove it into irrelevancy is still surprising.
Like I said, I believe Microsoft would come back for Pinterest in future and it will be interesting if they eventually acquired it.