Why Microsoft Is Willing to Pay So Much for GitHub | Hacker News Reader

Why Microsoft Is Willing to Pay So Much for GitHub

feeds.harvardbusiness.org

41 pointsraleighm7 comments

MS paid that much for GitHub because it was a bargain. Their market cap is about $770 billion, after the acquisition announcement they’re stock is up 2%, which paid for the acquisition and then some. And the $7.5b given to Github wasn’t in cash, it was completely done in MSFT shares.

In return they get access to millions of developers who’ve never tried .NET, Windows, or Azure. Even just converting a small fraction of those is billions in added revenue.

For me, its actually a really good thing. I've been on the .NET stack my entire career. I love using it (obviously, since I'm use to it). But, there's always been a lingering worry that time may be up for my skillset (at least for non-government work).

The move, seems as if Microsoft is really pushing hard to make .NET the defacto developer platform of the web. Or at least, focusing on making it very compelling to use. Not just for old work, but going into the future.

The author gives a very one sided picture why such investments make sense. Well, he earns a lot of money in this business.

I would be more interested how many of these acquisitions are successful?

I remember Nokia buying Navteq for €5.7 billion (US$8.1 billion) in 2007. And selling Here for €2.8 billions in 2015 (US$3.1 billion, US$2.9 billion according to another source, I didn't check the exchange rates, 200 million seem to be peanuts in the context). Inflation-adjusted the numbers would look worse.

Burning more than half of the acquisition value did obviously not save Nokia's mobile business on the way.

While we are at it Microsoft bought Nokia's mobile business just to close it down 3 years later and writing off US$7.6 billion.

Google bought Motorola phones for US$12.5 billion to sell it off for US$2.91 billion.

All this demonstrates is that corporations have immoral amounts of money to gamble with. The little droplet we can contribute to avoiding this is trying to spend our peanuts in favor of smaller businesses. (Yes, I still have a Skype, a LinkedIn and a github account)

I think that is what the author means as strategic vs. financial. For example, buying a company for its list of customers, to eliminate them as a potential threat, to get some IP/technology they have, etc.

You are right that the large tech companies have extremely large bankrolls to just do what they want in a sense.

If you view it from their perspective, a success might mean they get access to 1000's of companies using GitHub to try and sell Enterprise hosting, development tools, etc. to. All it cost them was $7.5B in stock.

Google sold off different parts of Motorola. And i believe in the end they still kept some patents. Google didn’t end up losing much money over Motorola.

> Microsoft is not paying $7.5 billion for GitHub for its ability to make money (its financial value). It’s paying for the access it gets to the legions of developers who use GitHub’s code repository products on a daily basis (the company’s strategic value) — so they can be guided into the Microsoft developer environment, where the real money is made.

This reaspm makes the most sense to me, re: why Microsoft purchased GitHub.

Atlassian + AWS was a threat to Azure. Enterprises refused to pay for both TFS and Alassian licenses. This is a headshot at Atlassian to create a MS monopoly in enterprise version control.

Reply on news.ycombinator.com