Microsoft to buy coding site Github for $7.5 billion

Microsoft Corp said it reached an agreement to buy GitHub Inc, the code repository company popular with many software developers, for $7.5 billion in stock.The deal will add to Microsoft’s operating income, including some costs, in its fiscal year 2020, the company said in a statement. Microsoft expects the deal to close by the end of 2018. The shares were up less than 1 percent to $101.32 at 9:32 a.m. in New York.The acquisition provides a way forward for San Francisco-based GitHub, which has been trying for nine months to find a new chief executive officer and has yet to make a profit from its popular service that allows coders to share and collaborate on their work. It also helps Microsoft, which is increasingly relying on open-source software, to add programming tools and tie up with a company that has become a key part of the way Microsoft writes its own software.

GitHub will operate independently and named former Xamarin CEO and current Microsoft developer tools executive Nat Friedman as it’s chief. It will continue to support the programming languages, tools and operating systems of the user’s choice.For Microsoft, acquiring GitHub is both a return to the company’s earliest roots and a sharp turnaround from where it was a decade ago.Microsoft’s origin story lies in the market for software-development tools, with co-founders Bill Gates and Paul Allen focused on giving hobbyists a way to program a new micro-computer kit. But that vision of software tools was applied very differently under both Gates and former Chief Executive Officer Steve Ballmer, who championed developers building proprietary software for Microsoft, not the kind of open-source projects found on GitHub.Microsoft has talked to GitHub, which hosts more than 28 million software developers working on 80 million repositories of code, on and off for a few years. Recently they began talks about a partnership but progressed to discussing an acquisition, according to another person familiar with the situation.GitHub was last valued at $2 billion in 2015, making today’s deal a win for GitHub backers like Sequoia Capital and Andreessen Horowitz.