Microsoft was not alone in chasing GitHub, which it agreed to acquire for $7.5 billion on Monday. Representatives from Alphabet's Google were also talking to the company about an acquisition in recent weeks, according to people familiar with the deal talks.
The talks for GitHub went on for several weeks, according to several other people familiar with the process, but at the end the auction was not close, suggesting Microsoft's bid was high enough to keep Google at bay. GitHub has, in the past, also attracted takeover interest from companies such as Amazon, according to people familiar with the matter.
These people declined to be named, as they were not authorized to discuss the deal with press.
Microsoft paid 25 times revenue for GitHub, said one person, which calculates to annual revenue of about $300 million for the code-sharing service, according to one of these people involved in the deal. Last August, the company said it had an annualized run rate of $200 million, and in October it said it was on track to book more than $100 million a year from its enterprise products alone.
Google and Microsoft declined to comment on the acquisition process.
Microsoft has seen its once-dominant Windows unit slip in market share in recent years, spurring a cloud-first reorganization and sending Microsoft looking for alternatives to court developers. Owning GitHub and LinkedIn also means that Microsoft now owns two top professional networks -- important in the continuing war for scarce tech talent.
While Google is making progress in its cloud efforts, the company has so far not made any big acquisitions in the cloud space under leader Diane Greene, who also sits on Alphabet's board of directors. This contrasts sharply with Microsoft's big acquisitions of GitHub and LinkedIn, which cost $26 billion.
Cloud applications company Salesforce has also grown in part through significant acquisitions, most recently paying $6.5 billion to buy Mulesoft, whose technology helps software developers stitch disparate applications together.