At a Fortune magazine event earlier today ahead of Microsoft’s big product event tonight, the company’s CFO explained its strategy for buying up companies like LinkedIn, GitHub and even Minecraft developer Mojang.
The company has been one of the largest, most active and highest-profile acquirers of late, and Microsoft CFO Amy Hood boiled down what the company is looking for in deals like those to this simple strategy: For the past five years, she explained, the company has been consistently looking for communities. Also for things like “networked assets,” plus growing markets and opportunities where Microsoft would end up being a better owner for the company being bought.
Per a CNBC recap of the event, Hood explained how LinkedIn connects professionals, Minecraft connects players, and GitHub connects developers. Said Hood, “Those types of assets are always interesting and always will be around the world.”
From the CNBC report, “Under Microsoft’s ownership LinkedIn has grown to 575 million members, up from 433 million when Microsoft announced the $26.2 billion deal in 2016. Meanwhile, GitHub has 28 million developers, and Minecraft has 91 million monthly players.”
Other smaller deals include Microsoft under CEO Satya Nadella buying up things like email app startup Acompli, the to-do list app developer Wunderlist, plus AI startups like Bonsai and Lobe.
There are no doubt some deals that got away from the company that Microsoft probably wishes it had been able to snag, but Hood batted away a question along those lines. “That’s not productive in my mind,” she said, adding that she prefers to look ahead and move forward and try to land the next one.
From a Fortune bio of Hood: “In the five years since becoming CFO, Hood has been a key architect of the tech company’s renaissance, during which its stock has returned nearly 300% (including more than 50% in the past year alone). In June, Microsoft celebrated hitting $100 billion in fiscal-year revenue for the first time, as well as the acquisition of developer forum GitHub, a $7.5 billion deal Hood helped engineer. A booming cloud business helped lift total revenue 14% in fiscal 2018 — the company’s fastest sales growth in a decade.”