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Microsoft Acquires LinkedIn, Expands into Social Networking

On June 13th, Microsoft announced that it will be acquiring LinkedIn for $26.2 billion.

The deal has been approved unanimously by both Microsoft and LinkedIn’s boards of directors, and it is expected to close by the end of 2016.

This is a big move for Microsoft, and its largest acquisition by far, as the company attempts to create a presence within social networking.

The $26.2 billion price tag breaks down to $196 per share, a 49.6% markup of LinkedIn’s share price of $131.08 at the time of the sale.

The acquisition gives Microsoft access to LinkedIn’s 433 million members, as well as to, a website for business training videos that LinkedIn acquired last year.

In its announcement, Microsoft stated that LinkedIn “will retain its distinct brand, culture and independence.” Jeff Weiner will stay on as LinkedIn’s CEO, reporting to Satya Nadella, Microsoft’s CEO.

The acquisition is a big move towards diversification for Microsoft. The company’s current strengths are almost exclusively in software, despite efforts to step into social networking with the acquisition of Yammer, a business-oriented communication service, in 2012. While Yammer never really took off, LinkedIn will place Microsoft firmly in the field of professional networking.

For Nadella, the acquisition fits perfectly into Microsoft’s mission “to empower every person and organization on the planet.”

He envisions the combination of professional networking with Microsoft’s powerful professional tools being helpful for LinkedIn’s users and beneficial to LinkedIn’s growth.

LinkedIn’s 433 users also represent a significant market for selling Microsoft’s products.

Our Conclusion: So what can we expect to see in the future?

We’ll have to wait to be certain, but it seems likely that Microsoft tools such as Office and its cloud technology will be integrated into LinkedIn.

Microsoft might also be introducing Cortana, its digital assistant, to LinkedIn. With any luck, the acquisition will mean more powerful tools for LinkedIn and more social innovation for Microsoft.


Written by content manager Meghan Woolley

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