Microsoft Completes $26 Billion LinkedIn Social Network Acquisition

Shortly after receiving regulatory approval from the European Union, Microsoft and LinkedIn announce that they have completed the multi-billion-dollar deal.

Two days after the transaction was cleared by the European Commission, Microsoft declared it had signed and sealed it's $26 billion deal to acquire the LinkedIn social network. Microsoft first announced its intent to acquire the professional and career-focused social network nearly six months ago, on June 13.

Satya Nadella, CEO of Microsoft, said that today "marks the close of the agreement for Microsoft to acquire LinkedIn and the beginning of our journey to bring together the world's leading professional cloud and the world's leading professional network," in a LinkedIn Pulse blog post. He also offered more details about what the combined company has in store for both ecosystems.

The combined company will support several new integration scenarios, Nadella said, including enterprise LinkedIn Lookup functionality powered by Microsoft Office 365 and Active Directory, the software giant's user identity and access management platform. In addition, the company has plans for incorporate LinkedIn's identity and social network into Outlook and across the Office software suite.

For a taste of what an integrated Office-LinkedIn experience looks like, Nadella said that members using Word to draft their resumes or update their profiles will soon be able to directly update their LinkedIn profiles and explore new job opportunities on the social network.

Microsoft also plans to enable LinkedIn notifications in the Windows Action Center and make LinkedIn's online learning and training resources available across Windows and Office 365. For sales organizations, Microsoft will connect the LinkedIn Sales Navigator tool with Dynamics 365.

"LinkedIn is a very attractive platform for Microsoft to sell additional business services/apps, like its Microsoft Dynamics products and other business marketing and sales focused tools," said Jack Gold, principal analyst at J. Gold Associates, in a research note sent to eWEEK. "It's also a natural fit to sell Office 365 services."

LinkedIn also broadens Microsoft's addressable market. Gold expects the software maker to begin offering LinkedIn users its products using "a 'freemium' strategy that provides a base level for free access and 'upsells' for greater functionality."

Despite these changes, Jeff Weiner, CEO of LinkedIn—a title he is retaining post-acquisition—said that the network's "commitment to privacy and security will not change. And our partners are still core to our business," in a letter to staffers. "We'll continue to remain focused on growing LinkedIn and creating value for our members and customers."

Acquiring LinkedIn is also a defensive play by Microsoft, observed Gold. "It keeps LinkedIn out of the hands of Google, Amazon, Salesforce and other potential business-focused rivals," he said, noted that that the market for enterprise-grade applications and platforms produces greater revenue than the consumer space.

Microsoft has a checkered past when it comes to acquisitions, with Skype and Great Plains Software (now Dynamics) as notable successes and aQuantive and Nokia hugely expensive failures. Time will tell if the LinkedIn buyout is a success, but so far it shows a lot of potential as Microsoft shifts its focus from software and hardware to enterprise online services, said Gold.

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...