Microsoft acquired GitHub for $7.5 billion in stock last week, the third largest in Microsoft’s history behind Skype ($8.5B) and LinkedIn ($26.2B). Microsoft paid 30x GitHub’s annual revenue, nearly 5x what they paid for LinkedIn back in 2016.
GitHub’s main revenue source today is paid accounts, which allows for private repositories and a number of other features that enterprises need, with pricing ranging from $7 per user per month to $21/user/month. Those building public and open source projects can use it for free.
“We are not buying GitHub to turn it into Microsoft; we are buying GitHub because we believe in the importance of developers.” This comes from GitHub’s incoming CEO Nat Friedman in a Reddit AMA.
The fact that Microsoft is installing a new CEO for GitHub is a clear sign that the company’s approach to integrating GitHub will be similar to how it is working with LinkedIn. “GitHub will retain its developer-first ethos and will operate independently to provide an open platform for all developers in all industries”.
