The news: PayPal announced Monday that the potential $45 billion deal to acquire Pinterest wasn’t happening, per Reuters. If it had gone through, it would have been the biggest acquisition of a social media company in the past decade, surpassing Microsoft’s $26 million LinkedIn purchase in 2016.
How we got here: Bloomberg reported last week that PayPal was looking to acquire Pinterest. Many saw the potential pairing as a quest for diversification for PayPal, which now has a long list of internet payments competitors. For Pinterest, the merger seemed like a logical next step in monetizing its large and loyal user base.
The bigger picture: PayPal’s acquisition of Pinterest could have raised red flags, especially with the growing tenor of regulation facing Big Tech companies. Making PayPal the de facto payments provider for Pinterest would have invited government scrutiny and likely held up regulatory approvals, negatively impacting both companies in the short term.
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