You probably didn’t expect your week to start this way: Microsoft has bought LinkedIn for $26.2 billion.
Microsoft is buying LinkedIn for $26.2B in cash
The company plans to integrate the career-oriented social network into many of its apps and services, including Office, Skype and Cortana. You’d get the details of the person you’re meeting for a business deal, for example, or get help from an expert when you’re working on an Office 365 project. Microsoft is vowing to maintain LinkedIn’s overall independence, including the role of CEO Jeff Weiner, and hopes to close the deal sometime in 2016.
According to Microsoft’s Satya Nadella, LinkedIn is a perfect fit. You need a “connected professional world” to get things done, he says, whether it’s getting help with a spreadsheet or fleshing out details in a customer relations tool like Microsoft’s Dynamics. And while Microsoft is purposefully keeping itself at arm’s length, Nadella sees the potential for revenue through subscriptions and (like it or not) targeted ads.
Suffice it to say that this is a huge move for Microsoft. It’s entering the social networking world in a big way — while LinkedIn isn’t direct competition for Facebook or Twitter, its 433 million members are nothing to sneeze at. The acquisition is also proof positive that Microsoft under Nadella is reducing its dependence on Windows and putting more of an emphasis on cloud services. This is as much about acknowledging a changing computing landscape, where Windows doesn’t necessarily dominate, as it is a bid to become a crucial service provider.
How Microsoft plans to use LinkedIn
The acquisition is a big one for both sides.
For Microsoft, it’s bringing a key, a missing piece of the company’s strategy to build out more services for enterprises, and give it a key way to compete against the likes of Salesforce.
Today, Microsoft is focused squarely on software (and some hardware by way of its very downsized phones business).
But LinkedIn will give Microsoft a far bigger reach in terms of social networking services and professional content — developing the early signs of enterprise social networking that it kicked off with its acquisition of Yammer for $1.2 billion in 2012. LinkedIn’s wider social network, pegged as it is to groups of employees and employers, will give Microsoft a sales channel to sell more of its products, and will serve as a complement to those that it already offers for collaboration and communication.
The companies are hosting a conference call at 8.45AM Pacific time. Below is the presentation deck they will use: