Microsoft - to buy GitHub

[PenkethBoy 2068]

https://forum.level1techs.com/t/microsoft-looking-to-buy-github/128033

 

 

[mastrmind11 722]

ugh

[CBers 7450]

Rats. Sinking Ship. Deserting.

[Tur0k 148]

This could be bad...

 

 

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[Waldonnis 148]

This rumour again?  Not saying it won't or can't happen, but this is the third time I've heard the same thing over the past couple of years and it still hasn't happened.  With the fate of CodePlex already determined and Github's market position, I suppose an acquisition could make some sense, though ("if you can't beat em, buy em").  Better/deeper/"more official" integration of Github into VisualStudio's team-oriented platforms would also be alluring (as would being able to extend GIthub's platform a bit).

 

Meh, change isn't inherently bad, and not everything Microsoft does is bad either.  If anything, I'd be more worried if Google were the interested party, since they seem to create/buy then phase out "products" faster than rabbits can reproduce...or just rebrand them endlessly while adding/subtracting the same features repeatedly because they never technically leave "beta" stage (read every one of their "wallet/pay" platforms, the 500 messaging apps they created then abandoned, etc).  At least Apple isn't interested...now THAT would be terrifying.

[Happy2Play 9780]

Did you see the banner/blog notice on GitHub today?

Microsoft is acquiring GitHub! Read our blog and Satya Nadella's post to learn more. 

Microsoft is paying $7.5 billion for GitHub

Edited June 4, 2018 by Happy2Play

[Waldonnis 148]

Yep, and I giggled appropriately.  Reading comments to all of the reporting about the acquisition has been equally hilarious...you'd think the world was coming to an end. A bunch of projects have already been moved to Gitlab because of it (yay FUD).  Time will tell what Microsoft's plans are and how new and existing Github projects will be affected, I suppose.

[mastrmind11 722]

Apparently MS did a $30B stock buyback and used some of that to buy Github.  Basically picking up Github for free.  I had no idea Github was so profitable.  I've never really considered their revenue streams until now.

Edited June 4, 2018 by mastrmind11

[Waldonnis 148]

Apparently MS did a $30B stock buyback and used some of that to buy Github.  Basically picking up Github for free.  I had no idea Github was so profitable.  I've never really considered their revenue streams until now.

 

They have a lot of enterprise customers out there, and undoubtedly some of those overlapped with Microsoft's development tools customer base (as well as their own developers using Github regularly since before CodePlex was sacked).  The acquisition does make some sense to me from that angle.  There's also the cloud services aspect.  I'm sure Microsoft is thinking that making it easier to develop/deploy "cloud-based" projects directly onto their Azure platform could be a big boost to that side of their business (the "Cloud Wars" are in full force right now and the three major players are all jockeying to vertically integrate notable platforms to bolster their cloud services offerings).

 

The big questions are public perception (some are already panicking and moving projects because...reasons) and if/how Microsoft influences the existing Github offerings.  If they turn it into CodePlex 2.0, it probably won't work out well, but if they preserve the existing offerings while extending functionality to allow for (but not require) better integration with VS along with easier publishing to their cloud platform (non-exclusively), then the acquisition may not be the "deathknell for Github" that some people think it is.  Time will tell, I suppose.

[Spaceboy 2573]

Apparently MS did a $30B stock buyback and used some of that to buy Github. Basically picking up Github for free. I had no idea Github was so profitable. I've never really considered their revenue streams until now.

how does a stock buy back make MS any cash? That’s them handing over $30bn to stockholders to cancel their stocks

[Waldonnis 148]

how does a stock buy back make MS any cash? That’s them handing over $30bn to stockholders to cancel their stocks

 

The purchase was paid for with 7.5B in stock rather than cash.  Supposedly, they estimate that their $30B buyback program's results will offset the stock payment within a year, so it should ultimately be a net wash within two quarters or so.  To quote Ultron, "Finance is so weird...".

[speechles 2055]

how does a stock buy back make MS any cash? That’s them handing over $30bn to stockholders to cancel their stocks

 

Two words: Share dillution.

 

If microsoft bought back $30 billion worth of shares. There are less shares that can "cash in" on their market value. Each outstanding share is worth more immediately after microsoft buys back $30 billion. Since github was $7.5 billion in new shares issued, this is still less than the $30 billion microsoft bought back. 30 - 7.5 = 22.5 billion worth of shares were taken off the market value. This means shareholders will value the stock more, create a bull run and raise the existing shares prices even more. Like @@Waldonnis says, within a few months microsoft can probably wrangle another buy-back and create even higher shareholder value. Microsoft wants their core market share value to climb, and buying github will certainly acheive that in the short term. Long term wise, it is up to how they manage that resource and integrate it into their products. What restrictions, price changes, or other things that may come of it is anyone's guess. Microsoft has been known to wrangle their own services ahead of any others.

Edited June 5, 2018 by speechles

[Spaceboy 2573]

The purchase was paid for with 7.5B in stock rather than cash. Supposedly, they estimate that their $30B buyback program's results will offset the stock payment within a year, so it should ultimately be a net wash within two quarters or so. To quote Ultron, "Finance is so weird...".

i understand exactly what a share buy back is and share dilution, my point was a share buy back is not going to directly give you the cash for the acquisition as was suggested in the post I quoted.

[speechles 2055]

@@Spaceboy thats just the point. The only thing needed to acquire was board approval. Github was likely the hold outs, holding out for the best deal. The best deal probably wasn't cash, which is why you end up with so much more offered in stock. There is for sure strings attached to their acquisition, like they can't dump the microsoft stock they were traded in exchange for a very long duration of time. A limited number of seats at microsofts board table, and possibly some type of offering to have the shares come with options. Not sure what the deal entails either, just armchair quarterbacking my opinion.

[ebr 16169]

I had no idea Github was so profitable.  I've never really considered their revenue streams until now.

 

What gave you that impression?  I don't think Github has ever turned a profit.  The latest figure I saw was -$66 million last year.

[mastrmind11 722]

What gave you that impression?  I don't think Github has ever turned a profit.  The latest figure I saw was -$66 million last year.

Profitable may be the wrong word.  Valuable.

[Tur0k 148]

Yea, There is less money in the PC OS product key and is disk market versus big brother big data marketing. Even computing consumption habits are changing. Moving from desktops to laptops to smart devices with big computing sitting on the cloud somewhere. I suspect that this is going to be used to reposition the organization since the computing markets are shifting. Ex:

1. The recent push into maker and dev markets with their

A. windows 10 IOT Core for RPI,

B . Getting net core (.net) running in Linux platforms.

2. M$ is moving windows 10 to be more friendly with Nix tech.

A. Support bash shell in windows 10.

 

I think they are trying to cozy up to makers and devs. I don’t mind so long as they

1. let open source remain open source.

2. don’t add any M$ ownership rules to people who would host with them.

3. Don’t add anymore needless big brother monitoring to the stuff hosted with github.

 

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Edited June 5, 2018 by Tur0k

[Sammy 790]

Git Hub needs to remain autonomous. If MicroSoft meddles in that the open source developers will most certainly move on to another Repository.

[chef 3810]

Check this out! The M$ CEO talks about the purchase.

 

 

 

 

 

 

I think this is going to be okay. Sounds like Microsoft will keep business as usual. Open Source. I love VS Code, Microsoft have made a lot of changes over the years to persuade how the general public perceives them. This might be the best business decision for their company based on the values that Github represents: Open Source material for developers by developers. I'm not moving my repo.

Edited June 6, 2018 by chef