In this article, we discuss the 10 biggest acquisitions of all time made by Microsoft. If you want to skip our detailed analysis of these stocks, go directly to Microsoft’s 5 Biggest Acquisitions of All Time.
Microsoft Corporation (NASDAQ:MSFT), the Washington-based technology giant, recently announced that it would be acquiring video game holding firm Activision Blizzard, Inc. (NASDAQ:ATVI) in a deal worth more than $68 billion, the largest ever purchase for the firm. The move comes as part of a sustained strategy by Microsoft Corporation (NASDAQ:MSFT) to pursue growth in the gaming industry through mergers and acquisitions. Microsoft Corporation (NASDAQ:MSFT) owns the popular gaming console Xbox and several best-selling games.
After the deal is completed, Microsoft Corporation (NASDAQ:MSFT) will become the third-largest gaming company in the world by revenue. Already one of the largest software firms in the world, the latest purchase also represents a push by Microsoft Corporation (NASDAQ:MSFT) into the “metaverse”. Californian rivals like Meta Platforms, Inc. (NASDAQ:FB) and Alphabet Inc. (NASDAQ:GOOG) have also made similar forays into the digital world of the future, in addition to ecommerce giant Amazon.com, Inc. (NASDAQ:AMZN), albeit through dramatically different methods.
Hedge funds have consistently backed Microsoft Corporation (NASDAQ:MSFT) as it pursues a plan for growth, mostly with huge success. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in the firm with 25 million shares worth more than $7 billion. At the end of the third quarter of 2021, 250 hedge funds in the database of Insider Monkey held stakes worth $65 billion in Microsoft Corporation (NASDAQ:MSFT), up from 238 in the preceding quarter worth $62 billion.
Our Methodology
These were picked from a careful assessment of the acquisitions that Microsoft Corporation (NASDAQ:MSFT) has made over the years. The purchases have been listed according to the amount that Microsoft Corporation (NASDAQ:MSFT) paid for them at the time. The exact amount and the date of the purchase is listed alongside other details for further clarity.
Image by Tawanda Razika from Pixabay
Microsoft’s Biggest Acquisitions of All Time
10. Hotmail.com
Date of Purchase: December 1997
Amount Paid By Microsoft: $500 million
Microsoft Corporation (NASDAQ:MSFT) started holding talks to purchase Hotmail.com in late 1997, completing the deal before the new year dawned. At the time, the $500 million that Microsoft Corporation (NASDAQ:MSFT) paid for the company, which provided a free webmail service, was the biggest acquisition ever made by the firm. Laura Jennings, the vice president of Microsoft Corporation (NASDAQ:MSFT) at the time, told CNET that the purchase reflected the need for a free mail service on MSN, the web portal of Microsoft Corporation (NASDAQ:MSFT).
Microsoft Corporation (NASDAQ:MSFT) also aimed to increase advertising revenue through the purchase of Hotmail.com. It aimed to bring the 9 million users of Hotmail by integrating Hotmail services into Microsoft Corporation (NASDAQ:MSFT) sites such as MSN, Expedia, and CarPoint. At the time, according to CNET, the total users of MSN totaled nearly 2.3 million, far below the membership of Hotmail. Microsoft Corporation (NASDAQ:MSFT) also aimed to compete with rival AOL through the purchase.
Just like Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT) is one of the companies seeking a foothold in the entertainment market.
9. Visio Corp.
Date of Purchase: January 2000
Amount Paid By Microsoft: $1.3 billion
Visio Corp. represented the second biggest purchase of Microsoft Corporation (NASDAQ:MSFT). Talks over the deal started in September 1999 and were completed by early 2000. According to a press release issued by Microsoft Corporation (NASDAQ:MSFT) in January 2000, the purchase was made through $1.5 billion in stock. Under the deal, the Visio Corp. would transform into a division of Microsoft Corporation (NASDAQ:MSFT) working within the Business Productivity Group.
Bob Muglia, the vice president of Microsoft Corporation (NASDAQ:MSFT) at the time, said on the occasion that the purchase would bring “visualization and diagramming software to a broader range of customers while improving the ways knowledge workers can present their ideas”. Visio Corp. was a firm that marketed diagramming solutions to business and enterprise clients. Under the terms of the deal, Jeremy Jaech, the president of Visio Corp., assumed an executive position at Microsoft Corporation (NASDAQ:MSFT).
8. Mojang
Date of Purchase: September 2014
Amount Paid By Microsoft: $2.5 billion
Mojang, the Swedish developer behind the famous game Minecraft, announced in September 2014 that the “pressure” of running the company had become too much on founders and they had decided to sell the company to tech giant Microsoft Corporation (NASDAQ:MSFT) in a deal worth $2.5 billion. Mincecraft was a game released in 2009 and had sold nearly 50 million copies on computers, smartphones, and consoles when Microsoft Corporation (NASDAQ:MSFT) acquired it.
When the announcement for the Mojang deal was made, Microsoft Corporation (NASDAQ:MSFT) included the free download estimates for Minecraft and claimed that the game had actually been downloaded 100 million times on just computers alone. Phil Spencer, the head of Xbox at Microsoft Corporation (NASDAQ:MSFT), sought to soothe fears regarding limiting of the game on certain platforms, saying at the time that Microsoft Corporation (NASDAQ:MSFT) had made a “commitment to nurture and grow it long into the future”.
7. aQuantive
Date of Purchase: August 2007
Amount Paid By Microsoft: $6 billion
Microsoft Corporation (NASDAQ:MSFT) entered into talks to acquire aQuantive in May 2007 and completed the deal in August 2007. The announcement was made on the Microsoft Corporation (NASDAQ:MSFT) website through a press release. The purchase was made to expand upon a plan by Microsoft Corporation (NASDAQ:MSFT) to provide the advertising industry with a “world class, Internet-wide advertising platform” that also housed the tools and services needed to generate high returns.
When the purchase was made, aQuantive was among a host of digital marketing agencies with high revenues. According to some estimates, it was the fourteenth largest in terms of revenue in the advertising space. Steve Ballmer, the CEO of Microsoft Corporation (NASDAQ:MSFT) at the time, said that the purchase was the “next step” in the evolution of the advertising network of the firm and a leap from the initial investment in MSN. aQuantive comprised three subsidiaries upon purchase that merged with the tech giant.
6. GitHub
Date of Purchase: June 2018
Amount Paid By Microsoft: $7.5 billion
GitHub was one of the most high-profile acquisitions of Microsoft Corporation (NASDAQ:MSFT). It was one of the first major deals of Satya Nadella, the present CEO of Microsoft Corporation (NASDAQ:MSFT). He succeeded Steve Ballmer in 2014. While announcing the deal, Nadella said that Microsoft Corporation (NASDAQ:MSFT) was a developer-first company and the purchase of GitHub, a premier software development platform, strengthened the Microsoft Corporation (NASDAQ:MSFT) commitment to “freedom and innovation”.
GitHub had more than 28 million developers using the GitHub platform when the deal was made. Under the terms of the deal, GitHub retained independence of operations, including freedom regarding coding languages and new projects. Morgan Stanley was the financial advisor to GitHub at the time of purchase. Microsoft Corporation (NASDAQ:MSFT) aimed to report GitHub financials as part of the Intelligent Cloud Segment of the firm and expected accretions to earnings through the deal.
Along with Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT) is one of the companies investing in the metaverse of the future.
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Disclosure. None. Microsoft’s 10 Biggest Acquisitions of All Time is originally published on Insider Monkey.
