What’s Nadella Up To? The Information’s Tech Briefing

Is Satya Nadella getting bored? The Microsoft CEO has done an amazing job since taking the helm of the aging software giant almost exactly seven years ago. By focusing on building up Microsoft’s enterprise cloud business, he has accelerated the company’s growth rate and lifted its stock more than 500%. Now, though, he appears to be going off on a consumer growth tangent. According to the Financial Times, Microsoft tried to buy Pinterest a few months ago—possibly in the same period that Microsoft unsuccessfully tried to buy ByteDance’s TikTok. While the Pinterest approach doesn’t seem to have gone anywhere, you have to wonder what’s next.

Last summer, TikTok appeared as bizarre a fit for Microsoft as you could find. Pinterest wouldn’t be much better. Like TikTok, the online scrapbooking service is a niche consumer business, far afield from either the enterprise operations that drive Microsoft or even the consumer-focused Xbox videogame segment that Microsoft has been expanding through acquisitions and with the launch of a Netflix-like subscription offering. Even assuming Microsoft avoided screwing up Pinterest’s fast-growing ad business, how would it help the software giant? Certainly not much financially. Pinterest’s revenue—$705.6 million in the fourth quarter—is what Microsoft generates in a day and a half. It’s not even enough to meaningfully increase Microsoft’s exposure to the ad market: Microsoft’s existing search ad revenue alone is about 4.5 times Pinterest’s revenue.