7 Companies Owned by Microsoft

Microsoft (MSFT), one of many world’s largest expertise firms, was based in 1975 by Invoice Gates and Paul Allen in a storage in Albuquerque, New Mexico. 5 years later, Gates and Allen have been employed to offer the working system for IBM’s first private pc (PC), adopted in 1985 by Microsoft’s launch of its now-ubiquitous Home windows software program product.

In 1986, the corporate raised $61 million in an preliminary public providing (IPO) that some analysts known as “the deal of the yr.” By the late Eighties, Microsoft grew to become the world’s largest PC software program firm.

The Redmond, Washington-based firm’s inventory rose greater than a hundredfold within the 10 years after the IPO, and right this moment it’s one of many world’s largest firms by market worth. Microsoft’s market capitalization is about $2.09 trillion as of April 15, 2022. The corporate posted web earnings of $61.3 billion on income of $168 billion for its 2021 fiscal yr (FY), which ended June 30, 2021.

Whereas Microsoft started as a software program firm, it has expanded its attain into broad areas of the tech {industry}. Together with software program, the corporate now sells private computing gadgets, cloud-computing infrastructure and providers, synthetic intelligence (AI), and extra. A lot of Microsoft’s enlargement has come by way of a string of small and enormous acquisitions totaling tens of billions of {dollars} in worth.

Not all of these acquisitions have labored out, nonetheless. As a part of its try and develop a Home windows Telephone to compete with Apple’s iPhones and Google’s Android smartphone working system, Microsoft acquired Nokia for $7.2 billion in 2014. However the deal was a significant failure. In the summertime of 2015, Microsoft needed to write off $7.6 billion associated to the acquisition and bought the model in 2016 for $350 million to HMD World, a subsidiary of Taiwanese agency Foxconn Expertise Co. Ltd. The Home windows Telephone has been discontinued.

Microsoft’s enlargement, each internally and through acquisition, has additionally introduced it below the scrutiny of regulators. In 2000, the corporate was ordered to interrupt up into two components after dropping a U.S. antitrust lawsuit. Whereas the ruling was overturned, Microsoft was ordered in 2002 to adjust to key guidelines to make sure a extra degree tech enjoying subject.

The criticism of Microsoft and different mega tech firms over their dimension and market dominance continues to today. Amid critics’ requires the breakup of huge tech firms akin to Amazon (AMZN), in early 2020 the Federal Commerce Fee (FTC) ordered Microsoft, Apple, Amazon, Alphabet (GOOGL), and Fb (FB) to offer info on each acquisition they did from Jan. 1, 2010, to Dec. 31, 2019.

Under, we glance intimately at six of Microsoft’s key acquisitions, which largely illustrate the corporate’s technique of transferring into new areas akin to social networking, video video games, telecommunications, and internet advertising. Additionally, we’ll take a look at a seventh deal: Microsoft’s pending acquisition of Nuance Communications (NUAN), a number one supplier of conversational AI options. Six of those offers occurred since 2010, the main focus of the FTC inquiry, whereas one occurred in 2007. The listing beneath additionally features a software program deal, which added to Microsoft’s legacy enterprise. Most often, Microsoft doesn’t escape the income or revenue for these firms.

LinkedIn

• Kind of enterprise: Skilled social community web site
• Acquisition worth: $27.0 billion
• Acquisition date: Dec. 8, 2016
• Annual income (FY 2021): $10.3 billion

LinkedIn, the business-centric social media web site targeted on serving to individuals domesticate their skilled networks, was based in 2002. It grew to become worthwhile inside 5 years. From 2007 to 2011, the yr it went public, the corporate grew from 15 million members to greater than 100 million. In 2016, LinkedIn was acquired by Microsoft, and the next yr reported greater than 500 million members in about 200 international locations.

Microsoft has taken a reasonably hands-off method with the acquisition, permitting LinkedIn to retain its core model and tradition, and initially, even its then-CEO, Jeff Weiner. LinkedIn primarily offers Microsoft with a useful social media platform and recruiting software that earns income by way of premium memberships. Nevertheless it additionally generates business cloud income for Microsoft by way of LinkedIn’s business enterprise.

Skype Applied sciences S.A.R.L

• Kind of enterprise: Telecommunications software
• Acquisition worth: $8.5 billion
• Acquisition date: Could 10, 2011

Skype Applied sciences, which is presently headquartered in Luxembourg, was based in 2003 by Niklas Zennström of Sweden and Janus Friis of Denmark.

Skype grew to become an early success story within the space of Voice over Web Protocol (VoIP), a communications expertise that permits customers to work together by audio by way of an Web connection as an alternative of an analog connection. From 2004 to 2012, the corporate’s registered customers soared from 1 million to greater than 250 million customers per thirty days.

Since Microsoft acquired Skype in 2011, the dad or mum has built-in its capabilities with applied sciences like Xbox and Home windows gadgets, and with on-line platforms like Outlook and Xbox Dwell.

GitHub

• Kind of enterprise: Software program improvement platform
• Acquisition worth: $7.5 billion
• Acquisition date: Oct. 25, 2018

GitHub was based in 2007 when Chris Wanstrath created the primary “commit,” a time period used to explain the motion of storing a file’s hierarchy and content material in a digital repository. GitHub has since change into a preferred open-source coding repository and improvement software for software program builders and enormous firms.

By the point Microsoft acquired it in 2018, GitHub had reached 30 million builders and was internet hosting greater than 100 million repositories. The acquisition demonstrates Microsoft’s concentrate on open-source improvement and its goals to speed up developer use of the platform and provisioning of extra instruments and providers to new audiences.

Mojang

• Kind of enterprise: Online game studio
• Acquisition worth: $2.5 billion
• Acquisition date: Sept. 15, 2014

Mojang, the Sweden-based online game studio finest recognized for producing the favored recreation Minecraft, was based in 2009 by Markus “Notch” Persson.

The corporate managed to promote greater than 200 million copies of the sport as of Could 2020, making it one of many best-selling video games of all time. The corporate was purchased by Microsoft in 2014.

Immediately, Mojang’s video games are performed on the Home windows and Xbox platforms, iOS, PlayStation, and extra. Microsoft has put the sport studio to a number of makes use of, together with designing an academic model of Minecraft for lecture rooms.

aQuantive

• Kind of enterprise: Internet marketing platform
• Acquisition worth: $6.3 billion
• Acquisition date: Aug. 13, 2007

Based in 1997, aQuantive encompassed a household of manufacturers targeted on offering digital advertising providers, together with promoting toolsets, session providers, media planning/shopping for, and extra.

Microsoft acquired the corporate in 2007 in an try and compete with Google out there for internet advertising. However just like the Nokia deal talked about above, the acquisition was a monetary failure. In 2012, Microsoft wrote down the worth of the advert enterprise by $6.2 billion, indicating that it drastically overpaid for aQuantive.

Microsoft nonetheless operates an advert enterprise, however it’s targeted on search promoting somewhat than on aQuantive’s specialty: show promoting.

ZeniMax Media

• Kind of enterprise: Online game writer
• Acquisition worth: $7.5 billion in money
• Acquisition date: March 9, 2021

Based in 1999, ZeniMax Media is a online game writer that creates and publishes unique interactive leisure content material for consoles, PCs, and cellular gadgets. It’s the dad or mum firm of Bethesda Softworks, which was based in 1986 and has constructed a powerful status by publishing award-winning video video games all through its historical past. A few of ZeniMax’s best-selling franchises embrace “The Elder Scrolls” and “Fallout.”

Microsoft introduced in late September 2020 that it agreed to amass ZeniMax for $7.5 billion. The acquisition was accomplished in March 2021 after being accredited by the U.S. Securities and Change Fee (SEC) and European Union regulators. The deal helped bolster Microsoft’s Xbox Sport Studios choices and enhance its competitiveness with large rivals akin to Sony, maker of the PlayStation recreation console and associated video games.

Nuance Communications

• Kind of enterprise: Conversational AI options
• Acquisition worth: $19.7 billion in money
• Acquisition date: March 4, 2022
• Annual income (FY 2021): $1.36 billion
• Annual web loss (FY 2021): $26.7 million

Nuance Communications was based in 1992 as Visioneer Inc. The corporate modified its title to Nuance Communications in 2005. Nuance is a number one supplier of conversational AI and cloud-based scientific intelligence for well being care suppliers. It affords scientific speech recognition software program constructed on Microsoft’s cloud platform, Azure.

Nuance helps well being care suppliers with scientific documentation and offers them with the instruments to supply higher affected person experiences. The corporate’s conversational AI software program can also be utilized by firms outdoors the healthcare {industry}.

In April 2021, Microsoft introduced that it agreed to amass Nuance for $19.7 billion. The acquisition, which closed in March 2022, builds on the partnership between Microsoft and Nuance that was first introduced in 2019. It additionally represents the most recent step in Microsoft’s technique to offer industry-specific cloud choices, akin to its Microsoft Cloud for Healthcare initiative that was launched in 2020 amid the COVID-19 pandemic.

Microsoft Variety & Inclusiveness Transparency

As a part of our effort to enhance the notice of the significance of range in firms, now we have highlighted the transparency of Microsoft’s dedication to range, inclusiveness, and social duty. The chart beneath illustrates how Microsoft stories the range of its administration and workforce. This reveals if Microsoft discloses information in regards to the range of its board of administrators, C-Suite, basic administration, and staff total throughout quite a lot of markers. We’ve indicated that transparency with a ✔.