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Microsoft’s empire already includes Minecraft, LinkedIn and a huge cloud busines...

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source link: https://www.washingtonpost.com/technology/2022/01/18/microsoft-empire-blizzard-acquisition/
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LinkedIn, Candy Crush and Minecraft: Microsoft’s empire goes far beyond Windows and Word

The tech giant’s nearly $69 billion acquisition of Activision Blizzard is only the latest move in the steady expansion of its empire

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Microsoft's “Minecraft” built for HoloLens in 2015. (Damian Dovarganes/AP)
January 18, 2022|Updated January 18, 2022 at 5:23 p.m. EST

Microsoft announced one of the biggest tech acquisitions in history on Tuesday, saying it was buying video game maker Activision Blizzard for $68.7 billion. The deal represents a massive land grab for Microsoft, and if it passes antitrust scrutiny, will make the company the owner of some of the world’s most popular and profitable video game franchises, including World of Warcraft, Call of Duty and Candy Crush.

But the acquisition also shines a fresh light on how big and powerful Microsoft is, and how far its empire sprawls away from its old-school software products like Microsoft Office and Windows. In the two decades since the U.S. government sued Microsoft for using its dominance in operating systems to freeze out competitors, the company has rebounded in a spectacular way. It now owns household-name companies in a variety of fields, from social media to gaming to vital tools used by computer programmers all over the world.

Compared to Facebook, Google and Amazon, Microsoft has received less attention from politicians who are trying to constrain the ever-growing power of Big Tech.

Here’s a look at all the stuff Microsoft owns that you might not have known about.

Microsoft developed and released the Xbox video game console in the early 2000s to compete with Sony’s PlayStation franchise. The epic rivalry has played out ever since, with the two companies releasing new consoles every several years and jockeying for more market share in what’s become a $45 billion industry.

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Buying Activision Blizzard will give Microsoft a massive boost when it comes to the titles it owns, and whether they will make some of them exclusive to the Xbox will be a question regulators will ask during the approval process. But Microsoft has already been buying game-makers for years to boost the Xbox and cement its position as a major funder of new games.

It bought Bungie before the Xbox came out, and the studio’s Halo first-person shooter’s exclusivity to Xbox helped it fight its way into a market already dominated by PlayStation and Nintendo. In 2014 it paid $2.5 billion for Mojang, the maker of world-building game “Minecraft.”

In the last several years it’s stepped up its acquisitions of smaller game studios, buying a handful of them every year, including Bethesda, the maker of the Fallout and Elder Scrolls franchises, in 2020.

‘Minecraft’

More than 140 million people, the majority of them children and teens, play the wildly popular world-building game “Minecraft” every month. Players can dream up entire universes and bring them into digital existence, creating staging grounds for stories to play out with other players from around the world.

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The game has been hailed as one of the first big examples of the metaverse — Big Tech’s favorite new buzzword that essentially means a future where more and more aspects of daily life take place in digital worlds.

LinkedIn

Microsoft bought the networking-focused social media platform in 2016 for $26.2 billion, its biggest acquisition up until Activision Blizzard. Since then, LinkedIn’s membership has nearly doubled to 800 million people. The acquisition gave Microsoft a way into the world of social media and expanded its battle over online advertising with the likes of Google and Facebook.

As a maker of business software, having access to data on who works where and in what position has also given Microsoft major insights into where to target its sales teams and an understanding of how fast certain companies are growing. During an earnings call last July, Microsoft said LinkedIn was now making over $10 billion a year.

Skype

Before Zoom, FaceTime and Google Hangouts, there was Skype.

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Microsoft bought the Luxembourg-based company in 2011 for $8.5 billion. The service helped pioneer the practice of Internet phone calls and video-chatting your family and friends who lived in other parts of the world. It was so dominant that the Oxford English Dictionary even added the verb “Skype” as a new word in 2014.

As more people moved to using mobile phones, though, the company struggled to switch Skype’s focus on desktop computers over to handhelds. And Microsoft’s focus on business software left the consumer-focused Skype by the wayside.

The technology lives on in Teams, a videoconferencing and messaging platform used by millions of people for work every day. Its popularity has ballooned during the pandemic, and more than 250 million workers use it every month, the company said in 2021.

GitHub

GitHub may not be a familiar name to you if you don’t work in tech, but it plays a huge role in how computer programmers work and collaborate with one another.

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Microsoft’s purchase of the company for $7.5 billion in 2018 was especially controversial because GitHub is meant to serve as a neutral space for people to upload, share and discuss code with others, often across multiple companies or organizations. Microsoft has maintained that GitHub can keep operating as an independent company, and its popularity has continued to grow.

Owning it, though, gives Microsoft yet another entry point into the all-important world of software development, raising its stature among other programmers and giving it insight into what kind of projects are being worked on by technologists around the world.

The Cloud

Microsoft’s homegrown Azure cloud business is the second-largest in the world, owning about 20 percent of the $150 billion market, according to Statista. Only Amazon is bigger, with about 34 percent of the market. (Amazon founder Jeff Bezos owns The Washington Post.)

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Microsoft’s cloud business is double the size of the one run by its historical rival, Google, a rare win for the firm in the two-decade battle between the two tech giants. Azure encompasses a range of products, letting thousands of companies build websites and apps and store their data in Microsoft’s data centers for a fee.

The cloud business has also helped Microsoft develop one of the strongest teams of artificial intelligence experts. As AI becomes more important, companies like Amazon, Microsoft and Google that have expertise in the field will be even harder to compete with for smaller firms.

But wait, there’s more

Microsoft’s tendrils run out into other industries, too, especially online advertising.

Over the past two decades, Microsoft has watched Google surpass it as the most influential company in terms of how the Internet’s plumbing works. Google’s Web browser and online ad infrastructure are both bigger and more powerful than Microsoft’s version, not to mention search. (Microsoft’s Bing has less than 3 percent of the market, compared with Google’s 92 percent, according to StatCounter.)

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But Microsoft has used acquisitions to try to play catch-up. It bought advertising technology firm aQuantive in 2007 for $6.3 billion just a month after Google bought another major adtech firm, DoubleClick. Google has since become the dominant player in the space, but Microsoft is still pushing into advertising. Last month, it bought adtech firm Xandr from AT&T for an undisclosed amount.

Microsoft also bought cellphone maker Nokia’s mobile hardware business and portfolio of wireless technology patents in 2013 for about $5 billion. At the time, the company hailed the purchase as a brave push into mobile phones that would bring more competition to a space already being taken over by Apple and Google. But it came six years after the first iPhone was released, and Microsoft’s Windows Phone that the deal was meant to improve never caught on with consumers. Microsoft ditched the business just three years later.

Microsoft makes its own line of tablets and laptops under the Surface brand. It began selling the computers in 2012, the first time it produced personal computers of its own, rather than just making software for other companies’ computers.

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