Microsoft is buying LinkedIn, the professional social network, for USD 26.2 billion in its biggest-ever deal. The combined entity is expected to reach out to more customers and partners, who can see tremendous innovation in the social-cloud collaboration, according to the two companies.
In a letter written to Microsoft employees about the acquisition, the Microsoft CEO Satya Nadella mentioned that Microsoft’s strategy is to integrate social, collaboration, communication and productivity to help its customers achieve business objectives of faster growth and quicker innovation. For developers he talked about APIs that are available through Azure and other tools to grow opportunity.
“LinkedIn and Microsoft really share a mission” of helping people work more efficiently, said Nadella in a conference call with analysts. “There is no better way to realize that mission than to connect the world’s professionals.”
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It was already known that LinkedIn’s management was not able to convince analysts of its value. In 2015, LinkedIn shares had climbed as high as USD 269, but since then they have dipped as investors have become more skeptical about most cloud-based businesses.
“Our companies are the world’s leading professional cloud and network. This deal will allow us to keep growing, investing in and innovating on LinkedIn to drive value for our members and our customers. Our members will continue to develop their skills, find a job and be great at that job, using our platform. We will continue to help our customers hire top talent, market their brand, and sell to their customers,” Jeff Weiner writes on his LinkedIn post.
For Microsoft too, a big part of the deal is about being at the center of the business worker’s world, believe experts. “Microsoft wanted to get into human resources without having to get into payrolls,” said Ray Wang, an analyst with Constellation Research in a statement.
After not succeeding in the mobile game, Microsoft was looking to be at the center of the worker’s world as too important to miss. Though Microsoft bought Yammer, an enterprise social collaboration company, for USD 1.2 billion in 2012, but that acquisition never really mattered.
Read more: Microsoft Buys LinkedIn; Strengthens Enterprise Social Media Biz
According to Nadella, with the integration of LinkedIn with Microsoft productivity and business-process applications (i.e. Office 365, Dynamics and Azure, Active Directory), there’s great potential to bring together Microsoft’s cloud – collaboration, calendar, documents, messaging, meetings, contacts, customer accounts, expertise and email, with LinkedIn’s professional network – prospects, jobs, universities, coworkers, insights, learning, and, recruiting and hiring managers.
This is among the largest deals in the technology history of the world. In 2015, Dell had acquired a merger with EMC at a massing USD 70 billion, making it the biggest ever acquisition in the technology sector. Facebook’s deal with Whatsapp came at a price tag of USD 22 billion.
The transaction has been unanimously approved by the Boards of Directors of both Linkedin and Microsoft and is expected to close this calendar year, Microsoft said in a statement.