According to an FT report, Microsoft had approached Pinterest about a potential merger, although the talks were not currently active. Since its initial public offering (IPO) in April 2019, Pinterest has seen its share price swell around 327% and left it with a market cap of around US$51bn following a surge in value during the coronavirus (COVID-19) pandemic.
If the acquisition goes through, it will be Microsoft’s largest to date but could attract the attention of US regulators in terms of both allowing big tech mergers and also the regulation of social media, which Microsoft will leave itself exposed to should the merger take place.
However, Microsoft already has a number of social networks under its belt, notably professional networking site LinkedIn, which it bought for US$26bn in 2016. The company also tried to buy the US operations of video app TikTok last year as its Chinese owner ByteDance came under pressure to sell its US operations over national security concerns.
The computing giant will also be eyeing social networks as a method of expanding use of its Azure cloud computing business, which is quickly becoming one of its fastest-growing segments and pitting it against rivals such as Amazon Inc (NASDAQ:AMZN), which runs its own cloud computing business, Amazon Web Services.
Pinterest, which is popular among hobbyists who often post collages featuring things like home décor, food, fashion and accessories, had around 442mln active users as of the third quarter of 2020, around 98mln of which are from the US.
Shares in Microsoft were up 0.5% at US$243.96 in pre-market trading on Thursday, while Pinterest was 7.9% higher at US$87.56.