Microsoft has struck a $26.2bn (£18bn) deal to buy professional social platform LinkedIn, paying more than Facebook did for WhatsApp.
LinkedIn currently has more than 430 million users worldwide, letting people network with fellow professionals, upload their CVs, share news and apply for jobs.
Under the deal, Microsoft said that LinkedIn would retain its “distinct brand, culture and independence”, with Jeff Weiner remaining as chief executive, reporting to Microsoft boss Satya Nadella.
Our CEO @jeffweiner’s reflections on today’s announcement that LinkedIn will be joining forces with Microsoft. https://t.co/TV43SkvXK5
— LinkedIn (@LinkedIn) June 13, 2016
A good match?
The deal unites two brands that perform strongly in the corporate sector. For Microsoft, Linkedin opens new opportunities for expand beyond software and into enterprise services while also helping it compete with the likes of Salesforce in the CRM market.
Microsoft also plans to use LinkedIn’s social graph (connections between users and companies) as an integrated selling tool alongside its existing CRM products.
Linkedin also recently expanded into online learning via its acquisition of Lynda.com- which could now be used to sell Microsoft products.
For LinkedIn, the deal provides it with powerful software to service and target its users.
“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said in a statement. “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.”
View this presentation from Microsoft and LinkedIn outlining the deal here:
LinkedIn/MSFT deal by TechCrunch
It is by far the biggest acquisition made by Microsoft, which has completed eight takeovers worth more than $1bn.
It paid $8.5bn for Skype in 2011 and bought Nokia’s mobile phone business for $7.2bn in 2013.
The LinkedIn acquisition also eclipses the $19bn that Facebook paid for WhatsApp in 2014.
The deal was unanimously approved by both companies’ boards, and is expected to close by the end of the year. The acquisition is still subject to approval by LinkedIn shareholders and regulators.
In a statement to LinkedIn employees, Weiner said “little is expected to change” and employees will have the same titles and managers.
“The one exception: For those members of the team whose jobs are entirely focused on maintaining LinkedIn’s status as a publicly traded company, we’ll be helping you find your next play,” Weiner said. “In terms of everything else, it should be business as usual. We have the same mission and vision; we have the same culture and values; and I’m still the CEO of LinkedIn.”