Microsoft buys LinkedIn for US$26.2B to expand its business products

LinkedIn will remain largely independent, and its CEO will report to Satya Nadella

Microsoft has made a big bet on LinkedIn, announcing Monday that it will spend nearly $26.2 billion in cash to purchase the enterprise-focused social networking and recruiting company.

The acquisition -- which is the largest in Microsoft's history and one of the biggest tech acquisitions ever -- will combine the world's largest enterprise-focused social network with one of the biggest enterprise software companies.

It's more than just a social play, though. In addition to LinkedIn's core professional networking product, Microsoft also gains access to products including presentation- sharing software SlideShare and professional training service Lynda.com.

One key purpose of the deal is to expand Microsoft's portfolio of software that reaches users at work, in a variety of different scenarios.

In a video accompanying the acquisition announcement, Microsoft CEO Satya Nadella presented a vision for productivity tools that are connected to a professional network and can help users improve at their existing jobs and find a new ones as well.

Microsoft sees a future where everyone's LinkedIn profile connects with all of their productivity apps, and automatically syncs information between Office apps. Furthermore, Microsoft plans to drive further personalization of its Cortana virtual assistant using LinkedIn information, so users can get details about upcoming meetings based on the profiles of the people they're meeting with.

LinkedIn has 433 million registered users worldwide, with 105 million of those users visiting the social network every month. Those are attractive numbers for Microsoft, especially since those people are potential customers for many of the company's products and services.

Jeff Weiner, LinkedIn's CEO, will retain control of the company's operations, and report directly to Microsoft CEO Satya Nadella. Microsoft says that LinkedIn will retain its brand, culture and independence after the acquisition, which is expected to close by the end of this year.

It's unclear how far that independence will stretch -- Microsoft didn't say whether it plans to leave LinkedIn's HR department independent of the company's central processes in Redmond, for example.

The news comes at a tumultuous time for LinkedIn, which has been performing poorly on Wall Street since the start of 2016. The company's fourth quarter earnings from 2015 disappointed investors, and its stock hasn't been able to recover from that precipitous drop.

It also may be a tough pill for Microsoft shareholders to swallow, considering that the company just finished writing down almost all of the value from its acquisition of Nokia in 2013. Since then, Microsoft has massively curtailed its ambitions of being a phone manufacturer and taken $8 billion in write-downs.

Microsoft's deal with LinkedIn is expected to close by the end of 2016. Microsoft will pay for the massive bill largely by taking on new debt. It has been approved by the boards of both companies, as well as by Reid Hoffman, the LinkedIn co-founder who remains the company's majority shareholder.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

The changing nature of brand power

Once upon a time, life was easy: You developed products, placed them in a well-located retail shop, wrapped them under an attractive brand and hired the best creative in town to promote them. Many business and brands were successfully built on this approach, even if it wasn’t always that easy.

Jean-Luc Ambrosi

Author, marketer

Putting the ‘human element’ back in marketing

During the recent CMO Momentum conference, Paul Mitchell shared how marketing leaders can create cultures that deliver

Paul Mitchell

Managing director, The Human Enterprise

The rise and rise of voice search

In 1982, an AT&T employee by the name of Plotzke predicted the rise of voice: “In fact, it has been predicted that, by 1990, well over half the communications dollars spent by businesses will be for products and services that include voice technologies.

Michael Jenkins

Founder and director, Shout agency

Have you be denied of a loan from your bank or any Financial Firm? *Do you need a loan to pay off your bills or buy a home?* Do you need ...

Mercy William

Facebook unveils 'Here Together' campaign in Australia

Read more

Bullshit

John Winkler

Kmart turnaround chief to exit Wesfarmers, Target

Read more

End your financial worriesAre you a business man or woman? And you are in need of an urgent loan as to start up your own business? Or do ...

lance

Kmart turnaround chief to exit Wesfarmers, Target

Read more

https://uploads.disquscdn.c... [magic school bus] KID: where are we going today MS. FRIZZLE: the zoo KID: but last week we went to SPACE ...

Germain3161

Sephora Asia details its journey to data-driven decision making

Read more

DP Apparel bietet große Auswahl Audi Rennbekleidung in Deutschland zu den besten Angeboten. Das Geschäft bietet auch qualitativ hochwerti...

DP apparel

Audi Australia gets a new CMO

Read more

Latest Podcast

More podcasts

Sign in