Microsoft takes advantage of antitrust spotlight on rivals to go hunting for large acquisitions

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CEO of Microsoft Satya Nadella gives a lecture about dream, struggle and creation at Tsinghua University on September 25, 2014 in Beijing, China. Nadella visited China for the first time on Thursday.Visual China Group | Getty Images

Twenty years ago, the United States government filed suit against Microsoft for abusing its market power. Today, Microsoft is empire building because the country’s regulatory focus is on its biggest rivals.

Microsoft announced Monday it had acquired Nuance Communications for $16 billion ($19.7 billion including net debt). The deal gives Microsoft a company that specializes in voice transcription and related artificial intelligence software. Nuance has a particular niche in health care, providing software to digitize conversations from doctor’s visits and facilitate clinical documentation.

The acquisition comes about a month after Microsoft closed its $7.6 billion deal for ZeniMax, the parent company of video game publisher Bethesda. That transaction is meant to boost Microsoft’s Xbox against growing video gaming competition. Microsoft has also been in talks to acquire Discord, a voice, text and video-chatting platform for games, for more than $10 billion. Those discussions have happened concurrently to the Nuance transaction discussions, which started in December, according to a person familiar with the matter.

Microsoft’s recent deal talks don’t stop there. The company nearly acquired TikTok’s U.S., Canadian, Australian and New Zealand operations last year in a deal that was being discussed in the $20 billion to $30 billion range. Microsoft has also recently approached Pinterest to gauge their interest in selling, according to a Financial Times report in February. Pinterest has a market capitalization of more than $51 billion.

Less than three years ago, Microsoft paid $7.5 billion for GitHub. Less than five years ago, Microsoft paid more than $26 billion for LinkedIn.

Spending tens of billions on acquisitions is starkly different from the strategies of the world’s other technology super giants — Apple, Amazon, Google and Facebook. It also just so happens that Congressional Democrats and government agencies including the DoJ and FTC have taken a close look at whether Apple, Amazon, Google and Facebook have abused their market power, and are considering separating their businesses or unraveling