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!

Error: Please check your email address.
Show Comments

Blog Posts

Maintaining trust in a sceptical world: The power of brand trust

The faith people have in brands creates opportunity for those brands to become trusted advisors. In turn, this builds success by increasing the brand’s profile, letting it broaden its product offering and driving stronger customer loyalty.

Dan Ratner

managing director, uberbrand

When growth stalls: How to boost growth in large organisations

The push to start new businesses continues. In Q1 2017, the number of seed and angel deals increased by 1.4 per cent compared to Q1 2016.

Con Frantzeskos

CEO, Penso

Why we need diversity in marketing

​When we read articles about the need for increased diversity in marketing land, it is often through the lens of gender.

Jodie Sangster

CEO, ADMA

We all know that digital marketing in order to promote a brand, products and services is by the use of electronic media. The evolution of...

Helaina Berry

Predictions: 17 digital marketing trends for 2017

Read more

Interesting insight, well explained and the examples are just apt.Thanks for sharing!

FreshMindIdeas

The politics of branding - Brand science - CMO Australia

Read more

When the world that we live in floods with gigabytes of content every day, we have to learn to be selective about it. Such educational we...

Paulina Cameron

ADMA launches education program to tackle viewability, ad fraud and brand safety

Read more

Hi, i am an Aistralian ALK patient, been on xalkori dec 13 to oct 15 and achieved remission of disease, since been on Ceritinib until no...

gary packer

Pfizer Australia adopts AI-powered digital analyst tool for sales and marketing decision making

Read more

Hi James, shouldn't marketers also be focusing on collecting and utilizing up to date first-party profiling data on customers so that mes...

Tom

3 ways customer data can increase online sales conversion

Read more

Latest Podcast

Getting Intimate with CX Ep 5: Tammy Marshall, founder, The B Hive

How much of customer experience is having the foresight to know what those individuals might like, versus asking them? In Episode 5 of this new podcast series, BrandHook MD, Pip Stocks, talks with Tammy Marshall about the importance of asking your customers questions, how consistency plays a role in engagement, but how the unexpected adds extra value.

More podcasts

Sign in