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 PC World newsletter!

Error: Please check your email address.

Tags MicrosoftLinkedInMergers and acquisitions

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Blair Hanley Frank

IDG News Service
Show Comments

Father’s Day Gift Guide

Most Popular Reviews

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?