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Microsoft announced June 13 that is acquiring LinkedIn in an all-cash deal valued at $26.2 billion or $196 per share, the largest deal under Satya Nadella’s watch as CEO of Microsoft. The companies expect the transaction to close before the end of 2016.
Based in Mountain View, Calif., LinkedIn employs 9,700 full-time workers worldwide. The company operates offices in 30 cities, including Bangalore, Beijing, London, New York and São Paulo.
In his letter to Microsoft’s employees, Nadella (pictured) noted that 433 million people have a profile on LinkedIn. The business-focused network reaches more than 200 countries and territories and derives more than 60 percent of its traffic from mobile devices. At last count, LinkedIn generated an estimated 45 billion page views per quarter and has more than 7 million active job listings.
That massive user base, comprised almost entirely of business professionals, presents a big opportunity for the Redmond, Wash.-based technology giant’s productivity software and cloud services offerings, particularly Office 365 and Microsoft Dynamics.
“This deal is the next step forward for Office 365 and Dynamics as they connect to the world’s largest and most valuable professional network,” wrote Nadella. “In essence, we can reinvent ways to make professionals more productive while at the same time reinventing selling, marketing and talent-management business processes.”
Microsoft envisions integrating LinkedIn’s newsfeed and user graph into Office-based workflows. For example, Nadella said Office may one day suggest experts that can help users complete tasks or serve up LinkedIn newsfeed items that pertain to a project on which a user is currently working.
Scooping up LinkedIn is also a big “cloud-first” move by Microsoft, according to Jack Gold, principal analyst at J. Gold Associates.
“LinkedIn as a major cloud-based product can be a primary driver for increased usage of Microsoft Azure, with additional services and apps delivered via Azure to LinkedIn users,” wrote Gold in a research note sent to eWEEK. “This allows Microsoft to keep Azure fully utilized, and takes away LinkedIn use from other potential rivals in the cloud.”
Jeff Weiner, CEO of LinkedIn—a title he will retain, reporting directly to Nadella—stated in a June 13 blog post that the “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,” he continued. “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.”
Suggesting that Microsoft plans on maintaining LinkedIn’s strong corporate identity, Weiner added that the social network “will retain its distinct brand, culture and independence.” That brand may soon start wending its way into a big swath of Microsoft’s product portfolio.
Beyond Office 365 and Dynamics, Weiner hinted in a lengthy LinkedIn Pulse post, that the LinkedIn graph may soon spread into other Microsoft offerings, including Active Directory, the Cortana virtual assistant, Skype, Bing and the Windows operating system itself.
The deal may also wind up giving Microsoft a firm foothold in the human capital management software market, a new area for Microsoft, said Weiner.