3 ms·
> how does this deal make any financial sense to Microsoft if the plan wasn't eventually to implement anti-competitive practices much later down the line? It m
by AmericanChopper 4y ago
> how does this deal make any financial sense to Microsoft if the plan wasn't eventually to implement anti-competitive practices much later down the line?
It makes perfect sense. These huge companies have a lot of unused capital, which they have to find productive uses for. Acquisitions in markets they already have competencies in are a rather obvious way to make use of it.
Internal R&D and launching new products is the best use of this capital (as it’s the most tax efficient), but it’s difficult to infinitely scale that spending efficiently (but acquisitions can effectively be one way of scaling this over the long term).
The alternative is dividends, or the much more tax efficient stock buy back. But long term, acquisitions are better for shareholders.