It’s Official: Microsoft Acquires GitHub For $7.5 Billion

Helen Aguilar
June 5, 2018

Microsoft have announced an agreement to acquire GitHub, the software development platform and web-based hosting service for version control using Git.

GitHub's website offers a way for software developers to store and share code with each other, making it easy for people to work on projects together and build on each other's work.

Microsoft says that it will retain GitHub's status as an "open platform", being free to use for open source projects and agnostic towards programming languages as well as development tools.

Github, on the other hand, claims to now support a community of more than 27 million people who share and work together to build software.

Microsoft will pay $7.5 million in company stock for Github, which was valued at approximately $2 billion back in 2015.

In a separate blog post, Microsoft CEO Satya Nadella addressed the acquisition and highlighted three key opportunities for GitHub ahead.

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Microsoft's vice president of developer services, Nat Friedman, will become the new head of GitHub. Microsoft expects the acquisition will be accretive to operating income in fiscal year 2020 on a non-GAAP basis, and to have minimal dilution of less than 1 percent to earnings per share in fiscal years 2019 and 2020 on a non-GAAP basis, based on the expected close time frame. But Julie Lerman, a GitHub user who works as a Microsoft liaison with freelance developers, cautiously welcomed the partnership. Founded in 2008, GitHub hosts 27 million software developers working on 80 million repositories of code.

Both Microsoft and GitHub haven't responded to requests for comment. Buying the company will help Microsoft become a central part of many software developers' lives without requiring it to introduce new products or features of its own.

In April, Microsoft reported that its earnings rose 35 percent to $7.4 billion in the fiscal third quarter, with revenue up 16 percent to $26.8 billion.

It's also a smart move by Microsoft, which has seen scorching growth in its cloud business over the past few years. At the time, Microsoft corporate vice president Brian Harry said: "Over the years, we've seen a lot of fantastic options come and go but at this point, GitHub is the de facto place for open source sharing and most open source projects have migrated there".

Microsoft shares rose almost 1 percent to hit a record high of $101.79.

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