In the past several years, Microsoft has changed their innovation strategy: invest rather than build. The latest of these is the $300M investment in the Nook division of Barnes & Noble. But this last deal isn’t a red herring.
List of Recent Microsoft Strategic Investments
|Date||Investment||Size in $M||Sector/Rationale|
|Oct-07||240||Social / Ad deal + Bing integration|
|Oct-10||AppNexus||50||Ad tech / Shut down AdECN and rely on AppNexus for Real Time Bidding exchange|
|Feb-11||Nokia||several billion||Mobile / Develop hand sets for Windows Phone|
|Apr-12||Nook||300||Mobile / Develop content for Windows Phone|
Microsoft has amassed a group of very powerful partners to help them grow and become more relevant. Facebook is integrated into many of Microsoft’s products including Bing and Windows Mobile. AppNexus is the backbone of Microsoft’s ad exchange. Nokia is a near exclusive handset partner and B&N will become a content distribution partner that may help Microsoft rival Amazon and Apple (at least that’s the goal).
To date, most of these investments are later stage. I suspect that Microsoft will become more aggressive with early stage investments as it builds its content ecosystem for its phone.