Published: Tue, June 05, 2018
Technology | By Nina Perez

Microsoft may be considering GitHub acquisition

Microsoft may be considering GitHub acquisition

Microsoft have announced an agreement to acquire GitHub, the software development platform and web-based hosting service for version control using Git. Many tech companies and individual developers use the platform to store and share certain code, and collaborate. Microsoft is the top contributor to the site, and has more than 1,000 employees actively pushing code to repositories on GitHub according to The Verge.

Subject to customary closing conditions and regulatory review, the deal is expected to be finalized by the end of the year, Microsoft said in a statement on its website.

Microsoft has been a developer-focused company from the very first product we created to the platforms and tools we offer today.

The prize: GitHub is used by over 28 million developers and holds over 85 million "repositories" of code.

Despite Github being valued by investors at $2 billion in 2015, the company preferred being bought out than going public.

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The acquisition arrives at a time when experts say Wall Street has rewarded Microsoft for its long-term investment in cloud computing and its shifting, more open work culture fostered by chief executive Satya Nadella. It has been looking for a new CEO since co-founder Chris Wanstrath announced his resignation from the role past year.

Microsoft purchased GitHub for $7.5 billion. It also helps Microsoft, which is increasingly relying on open-source software, to add programming tools and tie up with a company that has become a key part of the way Microsoft writes its own software. Bloomberg also reports that GitHub has been bleeding money in recent years, citing three quarters of 2016, so maybe it wouldn't have lasted much longer to begin with.

A source with insights into the ongoing negotiations told CNBC that the deal first came about as a result of discussions around a joint $35 million marketing partnership. Microsoft corporate vice president and founder of Xamarin, Nat Friedman, will become the new GitHub CEO.

That said, GitHub is more significant than Microsoft, and its unlikely its goal will be modified once the Redmond-based giant takes over day-to-day operations. Others struck a more serious tone, as they anxious that the deal might mean GitHub becomes closed off to anything but Microsoft technologies.

GitHub will remain an open platform, which any developer can plug into and extend.

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