Microsoft Wants To 'Check In' To Foursquare, Might Invest In Startup
Microsoft (NASDAQ: MSFT) could be planning to invest in one of New York's hottest startups.
According to Bloomberg, Microsoft is having "advanced" discussions with Foursquare managers about a possible investment.
The deal is far from final. One of Bloomberg's unnamed sources stated that Foursquare is also speaking to other companies about a possible investment. The person added that the talks with Microsoft may not lead to a deal.
If a deal is made, this would be the second time that Foursquare co-founder Dennis Crowley sold a startup to a major enterprise. In 2005, Google (NASDAQ: GOOG) acquired Crowley's other social networking company, Dodgeball.
That deal was ultimately a bust.
Four years after the acquisition was made, Google closed Dodgeball along with several other services.
In October 2012, Crowley told PandoDaily about the experience.
"I chalked Dodgeball up as a failure," he told the publication. "I was like, 'That's our chance.' I had a startup that sold to Google, which is a success, but it was a failure."
After failing with Google, could Crowley really be persuaded to go through it again?
Money talks, as they say, so that may depend on the terms of the deal. If Microsoft offers to acquire Foursquare or form a partnership that pours millions of dollars into Foursquare's bank account, Crowley might be tempted to give it another try.
The risk might be worth the reward. After all, Microsoft acquired Skype for $8.5 billion.
Skype was a mature company with a resilient user base and a popular brand name. But that does not mean that Microsoft won't pay serious coin for startups.
In 2012 Microsoft spent $1.2 billion to complete its acquisition of Yammer, which was founded in 2008.
Foursquare was founded in 2009. This means that it is now the same age that Yammer was when it was acquired.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
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