Interesting take on Microsoft’s recent purchase of GitHub from Slate’s Felix Salmon.
Why would Microsoft, a software company that has achieved global dominance through writing proprietary software, spend $7.5 billion on GitHub, a company dedicated to building up a world-beating repository of open-source alternatives? Are they buying it to kill it, a bit like the National Enquirer allegedly did with those tales of Donald Trump’s infidelities?
Not at all: Microsoft is the ideal home for GitHub, and the hefty price tag is merely a sign of how seriously Microsoft CEO Satya Nadella takes GitHub’s mission. Companies can be worth a lot more to a strategic acquirer than they would be on the open market, and GitHub is a prime example.
In that sense, it’s similar to Pret a Manger, the sandwich chain that was sold last week to the wealthy Reimann family for some 1.5 billion pounds. That’s a substantial premium not only to the 345 million pounds private equity firm Bridgepoint bought it for in 2008, but also to the amount that Pret would be worth as a stand-alone company on the stock market.