Want to Be Acquired by Microsoft? Here Are 2 Things It’s Looking For – Fortune

LAGUNA BEACH, Calif.—Listen up, startup founders: If you’re looking for a big corporate home for your young company (rather than an IPO), consider what one tech stalwart, Microsoft, wants.

“We look at everything, to be honest,” said Peggy Johnson, the Redmond, Wash. company’s executive vice president for business development, at the Wall Street Journal’s D.LIVE conference in Laguna Beach, Calif. “We look at things that will solve problems for us.”

Microsoft acquired eight companies this year, mostly smaller ones, she said. Here’s why.

Your Company Complements Existing Strengths

“We broadly look across a number of areas: artificial intelligence, quantum computing…the entire depth and breadth of Microsoft,” Johnson said. She went on, citing gaming, cloud and infrastructure, machine learning, and business software as a service. “We are constantly scanning for opportunities.”

She added: “We try not to look at everything through a competitive lens.” Instead, she asks: “What are the synergies? If it makes sense, we’ll proceed.”

Consider the Montreal AI company Maluuba. The startup was originally the target of a Microsoft Ventures investment before Microsoft thought it was worthy of purchase.

“We have a big focus on artificial intelligence,” Johnson said, noting the company’s recent restructuring around the capability. Though AI has been in development at Microsoft for 25 years, it’s more central than ever before, and Microsoft has about 8,000 people working on related technologies.

Though Microsoft has made about 18 AI acquisitions to date, it’s still hungry for more, the executive said—in particular companies working on AI developer tools.

Your Company’s Culture Is Compatible

Consider LinkedIn. Microsoft acquired the business-minded social network last year for $26.2 billion—a mind-boggling sum. But that transaction was the last step in a long series, Johnson said, and began with a partnership that went “very well.”

Most notably, the companies’ cultures were compatible, Johnson said. Figuring that out during a partnership made the idea to fully acquire the Sunnyvale, Calif. company much more palatable. Partnerships are “sort of a low-risk way to try something,” Johnson said. And if it makes sense, they pave the way toward a bigger deal.

“What can help us right now? If an acquisition can speed a process or fill a gap, we’ll jump right to that,” Johnson said. “It’s about timing, need…it’s not necessarily an algorithm” that dictates what is and isn’t acquired.

So What About Slack?

And what about Slack, the popular San Francisco collaboration software company that satisfies both of those needs? A deal between Microsoft and Slack has been oft bandied about, Johnson acknowledged, without denying that one was ever on the table.

“There was a rumor along those lines a few years back,” she said. And that was that.

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