On 05/06/2018 18:26, Alessandro Selli wrote: > They only did it because they had to.
Oh absolutely. I just don't see that as a necessarily bad or evil thing. Necessity is a driver of business and of business behaviour. >> I predict that they won't muck up GitHub. The fact is >> that GitHub needed an investor or buyer > Really? Did they need it? It doesn't seem to me they were looking for a > buyer or an investor, it was M$ who decided to assimilate them. Apparently GitHub has been in been on and off, semi-formal acquisition talks with Microsoft for some time. Did the owners "need" to sell? Not necessarily; there were other possibilities (see below) to raise more funding. Nevertheless, the owners did choose to sell. Note that Microsoft did not just "decide to assimilate them". That's just not how it works. The owners of Github had to *decide* to sell and decided in particular to sell to Microsoft. GitHub was privately owned so it could never be forced into being bought out in the same way that a publicly quoted company can be. > >> and Microsoft has the cash to >> prop it up. They could afford to support it even if it continues to make >> a loss. > GitHub was not operating at a loss: > > https://en.wikipedia.org/wiki/GitHub#Finance > > As of August 2016, GitHub was making $140 million in Annual Recurring > Revenue.[47] > > 47. Plassnig, Moritz. "GitHub is making $140M in ARR". Medium. Retrieved > 2016-12-19. > https://medium.com/@moritzplassnig/github-is-doing-much-better-than-bloomberg-thinks-here-is-why-a4580b249044 > If I understand correctly, Annual Recurring Revenue is a measure of income or sales (i.e. revenue), not profit. All the same, a relatively young, very fast-growing company like GitHub might well be expected to burn through cash (thus wiping out any profit that would otherwise have been made) at an eye-watering rate. However, that means that eventually new cash has to come from somewhere, such as (more) VC funding, an IPO, or a sale of the business. It seems that a sale of the business was what the owners chose. My guess is that they liked Nadella more than they liked Microsoft and its history. -- Mark Rousell
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