Companies Owned by MSFT

Microsoft Corp. (MSFT), one of the world’s largest technology companies, was founded in 1975 by Bill Gates and Paul Allen in a garage in Albuquerque, New Mexico. Five years later, Gates and Allen were hired to provide the operating system for IBM’s first personal computer, followed in 1985 by Microsoft’s launch of its now ubiquitous Windows software product. In 1986, the company raised $61 million in an initial public offering (IPO) that some analysts referred to as “the deal of the year.” By the late 1980s, Microsoft became the world’s largest personal-computer software company. The Redmond, Washington-based company’s stock rose more than a hundred-fold in the ten years after the IPO, and today it’s one of the world’s largest companies by market value. Microsoft’s market capitalization is about $1.6 trillion, slightly behind Apple Inc. (AAPL). The company posted net income of $44.3 billion and revenue of $143 billion for its 2020 fiscal year (FY), which ended June 30, 2020.

While Microsoft began as a software company, it has expanded its reach into broad areas of the tech industry. Along with software, the company now sells personal computing devices, cloud-computing infrastructure and services, artificial intelligence, and more. Much of Microsoft’s expansion has come through a string of small and large acquisitions totaling tens of billions of dollars in value.

Not all of those acquisitions have worked out, however. As part of its attempt to develop a Windows Phone to compete with Apple’s iPhones and Google’s Android smartphone operating system, Microsoft acquired Nokia for $7.2 billion in 2014. But the deal was a major failure. In the summer of 2015, Microsoft had to write off $7.6 billion related to the acquisition and sold the brand in 2016 for $350 million to HMD Global, a subsidiary of Taiwanese firm Foxconn Technology Co. Ltd. The Windows Phone has been discontinued.

Microsoft’s expansion, both internally and via acquisition, has also brought it under the scrutiny of regulators. In 2000, the company was ordered to break up into two parts after losing a U.S. antitrust lawsuit. While the ruling was overturned, Microsoft was ordered in 2002 to comply with key rules to ensure a more level tech playing field. The criticism of Microsoft and other mega tech companies over their size and market dominance continues to this day. Amid critics’ calls for the breakup of big tech companies such as Amazon.com Inc. (AMZN), in early 2020 the Federal Trade Commission (FTC) ordered Microsoft, Apple, Amazon, Alphabet Inc. (GOOGL), and Facebook Inc. (FB), to provide information on every acquisition they’ve done between Jan. 1, 2010 and Dec. 31, 2019.

Below, we look in detail at five of Microsoft’s key acquisitions, which largely illustrate the company’s strategy of moving into new areas such as social networking, video games, telecommunications, and online advertising. The list also includes a software deal, adding to their legacy business. Four of these deals took place since 2010, the focus of the FTC inquiry, while one took place in 2007. In most cases, Microsoft does not break out the revenue or profit for these companies.

Skype Technologies, which is currently headquartered in Luxembourg, was founded in 2003 by Niklas Zennström of Sweden and Janus Friis of Denmark. Skype became an early success story in the area of voice-over-Internet protocol (VoIP), a communications technology that allows users to interact by audio through an Internet connection, rather than through an analog one. Between 2005 and 2010, the company’s registered users soared from 50 million to more than 600 million. Since Microsoft acquired Skype in 2011, the parent has integrated its capabilities with technologies like Xbox and Windows devices, and with online platforms like Outlook and Xbox Live.

As part of our effort to improve the awareness of the importance of diversity in companies, we have highlighted the transparency of Microsoft’s commitment to diversity, inclusiveness, and social responsibility. The below chart illustrates how Microsoft reports the diversity of its management and workforce. This shows if Microsoft discloses data about the diversity of its board of directors, C-Suite, general management, and employees overall, across a variety of markers. We have indicated that transparency with a ✔.