Microsoft LinkedIn Mergers and Acquisitions

Microsoft agrees to buy LinkedIn for $26.2bn


By John McCarthy, Opinion editor

June 13, 2016 | 4 min read

Microsoft has agreed to buy professional social network LinkedIn for $26.2bn.

Jeff Weiner, Satya Nadella and Reid Hoffman

LinkedIn has been picked up for $196 per share in an all-cash transaction. Microsoft has pledged to continue the LinkedIn brand and its chief executive Jeff Weiner will remain in position, reporting to the chief executive of Microsoft, Satya Nadella.

Boasting 433 million members worldwide (not to be mistaken for monthly active users), Microsoft will have access to the rich data thrown up by its members, in addition to the Lynda learning platform which was purchased last year.

“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said. “Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet.”

“Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn’s network, now gives us a chance to also change the way the world works,” Weiner said. “For the last 13 years, we’ve been uniquely positioned to connect professionals to make them more productive and successful, and I’m looking forward to leading our team through the next chapter of our story.”

The deal is expected to receive the green light from the LinkedIn board at the end of the year.

The move is the latest example of a major technology business looking to expand its media offering, with Microsoft set to benefit from LinkedIn’s social networking services and professional content. Interestingly, the numbers suggest that the social network is getting better at monetising its users, with revenue up 35 per cent in its first quarter that in turn outpaced the 9 per cent increase in monthly active user growth.

It’s that growth combined with the fact that LinkedIn has grown its member base fourfold in five years, that has led some industry experts to see the business as a fillip to a Microsoft that’s trying to expand from its core software to broader products for enterprises.

Terence Kawaja, founder and chief executive of investment bank Luma Partners, said LinkedIn “makes Microsoft relevant again”.

“I don’t think there’s one company in the world that doesn't use Microsoft’s products and so they already have business relationship with all those people and companies. Think about all the registered users of their software and that’s increasingly moving to the cloud and now you have a professional network that seems to mesh nicely with that network," he mused.

Linda Sullivan, partner and head of media and digital at Cavendish Corporate Finance, continued on this point: “The near term strategic rationale lies in the integration of LinkedIn with Office365, in line with the previous integration with Yammer for enterprise customers. In the longer run, assimilating the information hosted on LinkedIn in personal assistant Cortana promises to boost the value it offers to users, helping take the value of Microsoft’s AI to the next level and possibly enabling LinkedIn, with its product to become a leader in professional development under Microsoft’s wing.”

Microsoft LinkedIn Mergers and Acquisitions

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