Why is Microsoft still trying to buy into the consumer market? | ZDNet

Credit: Pinterest

Microsoft approached Pinterest “in recent months” on the acquisition of the social media company, the Financial Times reported earlier this week. Thought the conversations were no longer active, according to FT, the move – if accurate – causes some of us Microsoft monitors to shout into our quarantine sites “WHY, MICROSOFT, WHY?” (OK, maybe just me. But the question is still right for a number of us.)

Microsoft is an enterprise software and service company that has also been successful in gaming. Microsoft’s attempt to try has also become a major consumer-focused strength pretty much not going well. That has not stopped Microsoft from looking for ways to try to parlay its business success in the consumer space. There is even a Microsoft business unit called Modern life and devices dedicated specifically to this mission.

Microsoft executives over the years have repeatedly said that Microsoft cannot afford to admit the consumer market. I do not mean to admit financially, although I am sure it would hurt them to leave money on the table. But admit strategically because children, students and other non-business customers will one day be able and hopefully will develop into business customers. And if Microsoft does not go after this group of people, its competitors will. And that will put Microsoft’s business franchises at risk. Then goes the public reasoning for Microsoft’s consumer obsession ….

Microsoft avoided a major headache last year when it had to scrap its bid for TikTok. Although many of us tried to join a plausible list of reasons why the Microsoft TikTok agreement was not completely insane, doing so was challenging.

Some of the possible reasons for Microsoft’s alleged interest in Pinterest are similar to those we mumbled when we thought of TikTok’s potential appeal.

Pinterest – a self-described “visual discovery engine” – is an AWS customer, says FT. It has a strong advertising base, a monthly user base of 459 million (the majority of which are younger women) and fits the profile of a company that comes with a built-in loyal user community. Microsoft officials have repeatedly said the company is looking for strong, ready-made communities as criteria for acquisitions like Mojang (Minecraft), GitHub and LinkedIn.

Microsoft has made a couple of partnership announcements with Pinterest – the most recent of which involved its new Edge browser and its collections feature. Microsoft WebXT Group is about the connections between the browser, advertising and news / media.

So does all this add up to a good reason to spend billions on Pinterest? I guess Microsoft, Pinterest or both decided the answer was no.

People often ask me who I think Microsoft might buy next. I recite the usual list of likely markets it should consider – security, AI, virtualization, gaming. But it seems that the powers that be with Microsoft are also more than willing to try to buy into the consumer realm. I doubt Pinterest and TikTok will be the last consumer-centric companies Microsoft will consider when looking at ways to spend its cash.

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