Tue, Jun 05, 2018 - Page 10 News List

Microsoft to buy coding site GitHub

THE WAY FORWARD:The two companies had been in talks about a partnership, but the negotiations progressed into discussing an acquisition, which would benefit them both

Bloomberg

Microsoft Corp has agreed to acquire GitHub Inc, the code repository company popular with many software developers, and could announce the deal as soon yesterday, people familiar with the matter said.

GitHub preferred selling the company to going public and chose Microsoft partly because it was impressed by chief executive officer Satya Nadella, said one of the people, who asked not to be identified discussing private information.

Terms of the agreement were not known on Sunday. GitHub was last valued at US$2 billion in 2015.

The acquisition provides a way forward for San Francisco-based GitHub, which has been trying for nine months to find a new chief executive officer and has yet to make a profit from its popular service that allows coders to share and collaborate on their work.

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.

Microsoft spokesman Frank Shaw declined to comment. GitHub did not return an e-mail seeking request for comment.

GitHub is an essential tool for coders. Many corporations, including Microsoft and Alphabet Inc’s Google, use GitHub to store their corporate code and to collaborate.

It is also a social network of sorts for developers. While GitHub’s losses have been significant — it lost US$66 million over three quarters in 2016 — it had revenue of US$98 million in nine months of that year.

In August last year, GitHub announced that it was looking for a chief executive officer to replace Chris Wanstrath, one of the company’s cofounders.

In the interim, GitHub chief business officer Julio Avalos joined the company’s board of directors and took over much of the day-to-day leadership of the company.

Microsoft has talked to GitHub on and off for a few years.

Recently, they began talks about a partnership, but progressed to discussing an acquisition, according to another person familiar with the situation.

GitHub hosts 27 million software developers working on 80 million repositories of code.

Microsoft, once opposed to that kind of open-source software development, is now one if the biggest contributors to GitHub.

As Nadella increasingly moves the company away from complete dependence on the Windows operating system to more in-house development on Linux, the company needs new ways to connect with the broader developer community.

Business Insider first reported talks between the companies on Friday.

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