Microsoft adds LinkedIn to its professional network for $26.2 billion

Microsoft announced this morning that it will be acquiring professional social network LinkedIn for $26.2 billion, or $196 per share, in an all-cash transaction. That price represents about a 33% premium on LinkedIn's $131.08 closing price from last Friday. The companies say that LinkedIn "will retain its distinct brand, culture, and independence." The deal has already been approved by both companies' boards of directors, and the companies expect the transaction will close by the end of this year. LinkedIn CEO Jeff Weiner will remain at his post, and he'll report directly to Microsoft CEO Satya Nadella.

In its presentation regarding the deal (PowerPoint), Microsoft envisions a future where professionals' LinkedIn data will eventually become central to services like Windows, Outlook, Skype, and SharePoint. The company calls the profile a single "source of truth" for a professional's identity, background, and accomplishments. The company's vision also includes a future where data from Office apps is integrated with a professional's LinkedIn news feed. LinkedIn data might also be made available to Microsoft's Cortana assistant, whose future role in business might include bringing you up to speed on a meeting participant's background and sharing Office docs with those participants, all using LinkedIn's "social graph."

Microsoft also sees value in LinkedIn's Learning platform (formerly Lynda.com), an online resource that offers a wide range of courses for professional development. LinkedIn Learning might be integrated with Office apps in the future to bring employees up to speed on a task right when they need the help. Redmond's Dynamics CRM service might also connect to LinkedIn's Sales Navigator product to help sales professionals engage in "social selling."

If this deal goes through, it would appear to be Microsoft's largest acquisition ever. We can only guess that the company is looking past Windows and Office into a post-PC future. CEOs Nadella and Weiner will be hosting a conference call at 11:45 AM ET (8:45 AM PT) to discuss the acquisition.

Comments closed
    • alrey
    • 3 years ago

    LinkedIn is not profitable and the losses is getting bigger every year. These acquisitions .. maybe the silicon valley TV series is right πŸ™‚

    • Shouefref
    • 3 years ago

    It’s MS trying to get into the social media business.
    Like Zune trying to get into the mp3 player business.
    And Lumina trying to get into the smartphone business.
    And so on.
    Will probably fail again.

    • TheMonkeyKing
    • 3 years ago

    Great! Now combine this with MS VR and you can virtually pretend in having a job!

    • Shouefref
    • 3 years ago

    Today I’ve deleted all my contact persons from LinkedIn, and all my group memberships.
    I don’t know how MS’s ownership of LinkedIn will turn out, so I leave, and then see what happens.
    Anyway, it’s not a bad idea to clean up social media now and then.

      • MarkG509
      • 3 years ago

      But, I have almost 200 contacts, all of which have endorsed me for several “skills”. I’m also on ResearchGate, but that’s just too “technical” for the LinkedIn crowd.

      • smilingcrow
      • 3 years ago

      Yeah, sometimes you just have to nuke from orbit.

      • Voldenuit
      • 3 years ago

      Deleted my LinkedIn account altogether.

      I wasn’t getting any value from it anyway.

    • flip-mode
    • 3 years ago

    Mind blowing to see all those LinkedIn shareholders get a 33% monetary boost “just like that”.

    • Kretschmer
    • 3 years ago

    At the $643MM profit of 2015 this represents 38 years of earnings. In a fickle sector. Wow.

      • Pwnstar
      • 3 years ago

      Yup, This valuation is literally insane.

    • kamikaziechameleon
    • 3 years ago

    While in my office I know we will be very happy with this acquisition… we are also concerned with Microsoft’s general management and record of acquisitions recently. The potential here is good. But weather it will be well utilized or squandered… I am a bit worried there.

      • biffzinker
      • 3 years ago

      Weather? I think the word you were looking for was whether. πŸ˜‰

        • Shouefref
        • 3 years ago

        He uses MS spelling control.

          • curtisb
          • 3 years ago

          That would be grammar. Technically, he spelled “weather” correctly. πŸ™‚

    • smilingcrow
    • 3 years ago

    Did Henry Winkler join Microsoft’s acquisitions department after leaving Happy Days?
    They seem to be jumping so many sharks that their next acquisition might be SeaWorld.

    I look forward to the TV ad showing The Fonz on a surfboard jumping a shark whilst simultaneously dialling it from his WP10 equipped phone to see if it wants to connect via LinkedIn.

      • Crackhead Johny
      • 3 years ago

      “Jumping the Shark” is what happens when a TV show (you could do it in anything else long running like say a book series) decides to do something extreme to try to drag viewers back or to retain them, when it is on its last legs.
      Microsoft is still profitable enough to casually go buying things like Nokia, Linkedin, Mojang, etc. So MS is not on its last legs.

      In fact their “viewers” are still steadily growing, due to the power of monopoly. So MS is not capable of any shark jumping.

      When you are trying to get into the “Social Networking like Facebook” business, buying a big name is what you do if you cannot grow one in house. This is not a crazy stunt to attract people to your show/company or retain the ones you have.

      Next time you try to use a popular meme to “make funny” please understand you have to know what you are talking about for it to work. You can’t just throw out what you heard people laugh at recently and assume it will just work for you.

        • smilingcrow
        • 3 years ago

        I am happy to riff on a meme out of its general context.
        I don’t see the rigid walls that are trying to contain as being anything but guidelines.

          • Spunjji
          • 3 years ago

          I lol’d, +1s were yours

            • smilingcrow
            • 3 years ago

            Me thought the gentleman did protest too much!

            • Crackhead Johny
            • 3 years ago

            The value of education in America! -3 for education, +4 for being wrong.
            America F yeah!

            • smilingcrow
            • 3 years ago

            With humour you either like it or not, it’s not a matter of right or wrong.
            You seem to be taking it very seriously.

            Talking of Henry Winkler I saw him in pantomime in Wimbledon many years ago.
            He looked uncomfortable in that role, like a fish out of water or maybe more like a shark out of water. πŸ™‚

      • blastdoor
      • 3 years ago

      I think the main shark jump for Microsoft was the development of Longhorn.

        • smilingcrow
        • 3 years ago

        Windows 8.0 was when they bit me. Having to do a web search to work out how to shutdown Windows was a surreal moment.

    • Firestarter
    • 3 years ago

    huh maybe now I can finally justify not having used linkedin yet. I swear some people think not using linkedin is equal to committing career-seppuku

      • NovusBogus
      • 3 years ago

      I set up an account many years ago to appease some recruiter who was convinced I had to do this, then proceeded to never touch it again. Don’t feel I’m missing out on much.

    • WhatMeWorry
    • 3 years ago

    Yay, I can now Skype into LinkedIn via Minecraft. Wait…How come my Nokia phone doesn’t work anymore?

      • flip-mode
      • 3 years ago

      LOL. This post deserves more upthumbs.

    • brucethemoose
    • 3 years ago

    OK, so let’s divide that $26.2 billion by the number of LinkedIn users. Then let’s double the userbase to account for explosive growth.

    That gives us $30 per user, assuming all those accounts are legit and active which is almost certainly not the case. That user base already represents a big chunk of the global workforce with internet access, too.

    I’m no business major, but I don’t see how Microsoft expects to make $30 off every LinkedIn user, plus whatever it takes to run the servers, pay the employees etc.

      • puppetworx
      • 3 years ago

      By selling their data.

      • blastdoor
      • 3 years ago

      I think the right way to look at it is that Microsoft has a huge pile of money burning a hole in its pocket. The CEO has to spend some of that money on acquisitions in order to brag to the other CEOs about the size of his acquisitions. So that money is heading down the crapper one way or another. The most successful CEOs are the ones who burn through the least money. By that standard, this is brilliant.

      • kuraegomon
      • 3 years ago

      LinkedIn revenues actually come primarily from recruiting professionals. You should find out how much a LinkedIn recruiter account costs – try $100/month for Recruiter Lite, $900/month for Recruiter, etc.! LinkedIn makes money off selling preferred access to their user base, and a bit off of selling premium access to active Job seekers/networkers. And their revenues? Well, 4Q2015 looked like this:

      “Revenue increased 34% year-over-year in the fourth quarter to $862 million and increased 35% in 2015 to $2,991 million. ”

      If you’re doing $3B a year before Microsoft … I can describe a pretty reasonable value proposition from some of the potential synergies. Now, as to whether Microsoft will be able to execute and deliver that value…? Different story… If they do, Satya will have earned every penny of his considerable compensation.

        • brucethemoose
        • 3 years ago

        Interesting, I didn’t think about it from the recruiter side.

          • kuraegomon
          • 3 years ago

          I’ve known recruiters to be all over the map about whether it’s actually worth what their companies pay for it, but I sat next to a couple of them at my last job, and they used it relentlessly. And I technically got my current job via a LinkedIn recruiter contact.

          If you’re in e-commerce or telecom, and you have a well-maintained profile and a reasonably current skillset, you’ll get pinged weekly to daily, based on my experience. If I went all out and actually spruced up my profile to the max, I suspect I’d get more action than I could handle … which is why I’ve avoided doing it πŸ™‚

          I also suspect that the tech sector in general is where a majority of the LinkedIn recruiting action is, but I could be completely wrong. Still, that’s where the highest recruiting competition is…

    • Chrispy_
    • 3 years ago

    YAY! \o/

    Finally Linkedin will die the death that it deserved from the outset. Microsoft may have other plans but we all know that Microsoft buyouts result in the death of the IP and all the staff being laid off.

      • HisDivineOrder
      • 3 years ago

      In honor of this fact, I think Microsoft can now resurrect Clippy and make him the new mascot of LinkedIn.

        • Wirko
        • 3 years ago

        Everything may die but IP will climb out of the grave when the time is right and haunt some startup company out of business.

        • Krogoth
        • 3 years ago

        “Hey! It looks like you are writing a CV/Resume!”

        “Would you me like to forward it to these following recruiters?”

        • alrey
        • 3 years ago

        oh sh*t!

      • adampk17
      • 3 years ago

      Amen!

      • blastdoor
      • 3 years ago

      I predict the opposite — this won’t kill it, it will expand it.

      Microsoft might have a pretty tenuous understanding of consumers, but they understand corporate bureaucrats incredibly well. The bureaucrats in HR and corporate communications are going to eat this up.

        • Chrispy_
        • 3 years ago

        I’m not saying you’re wrong, but in my industry (AEC) LinkedIn is a dirty word to be avoided.

        Maybe if you work in an industry where people hop from job to job regularly it would be useful but for lock-in careers that have large up-front training and qualification investments, LinkedIn has been a menace that very obviously lied, faked accounts and ignored attempts to delete/unsubscribe in the past – as a blatant attempt to grow their user numbers.

        Microsoft may have acquired the name and IP but my limited opinion of it is that the name is damaged goods with a bad reputation.

          • slowriot
          • 3 years ago

          I thought everyone had agreed to let LinkedIn go die in the dark corner, like it deserves. Guess not…

            • Spunjji
            • 3 years ago

            If you work in Sales (or for a company that is primarily Sales oriented) it is hair-tearingly tenacious.

          • blastdoor
          • 3 years ago

          [quote<]Maybe if you work in an industry where people hop from job to job regularly[/quote<] I don't think that even needs to be the case. You just need to work in an industry in which having professional contacts with people outside of your own firm is important/useful. Having a service that facilitates that -- and is integrated with Outlook and all the other MS stuff that corporate IT loves -- is probably a winner. edit -- don't get me wrong. I don't like LinkedIn. But it's the perfect Microsoft product/service -- it's the kind of thing that people don't necessarily want to use -- it's the kind of thing people feel they *have* to use for work.

          • anotherengineer
          • 3 years ago

          What industry is AEC??

            • DrDominodog51
            • 3 years ago

            Architecture Engineering and Construction according to wikipedia.

      • curtisb
      • 3 years ago

      I hope not…unless they kill off LinkedIn but keep Lynda.com. Lynda.com is an awesome resource and I was quite surprised when they were purchased by LinkedIn. I’d like to see Microsoft roll Lynda.com subscriptions into licensing agreements…particularly at a reduced (or free) rate with Office/O365 licensing.

      • jihadjoe
      • 3 years ago

      Embrace, Extend, Extinguish!

    • sweatshopking
    • 3 years ago

    Yay. Buying a failing social network. Great job. And only 33% more than it is worth! Awesome!

      • HisDivineOrder
      • 3 years ago

      At Microsoft, they call this “The Skype.” Microsoft loves to buy things long after they’ve plateaued. Look at Minecraft! πŸ˜‰

        • esc_in_ks
        • 3 years ago

        I thought it was called “The Nokia”.

        • sweatshopking
        • 3 years ago

        Minecraft seems to be paying off. I doubted it, but that thing is a money printing machine, and is now coming hard at education. The others though. Gosh, skype still sucks badly, after all these years Idkwtf

      • tipoo
      • 3 years ago

      You always pay 20-40% on top of the market cap for full control. Buyouts aren’t frequently just the first price you see on google for the whole company.

      Not that I think it was a good idea, but I’ve seen this overpay thing come up a lot.

    • psuedonymous
    • 3 years ago

    Bizarrely, I’d actually trust LinkedIn MORE under the umbrella of Microsoft than on their own. LinkedIn’s behaviour thus far has been pretty scummy (multiple security breaches, address-book scrubbing and spamming, aggressive pushing of ‘premium’ features, etc).

      • blastdoor
      • 3 years ago

      Yup, and as DreadCthulhu observed, this actually does involve some “synergy”.

      This actually might end up being something other than an embarrassing blunder.

      • NovusBogus
      • 3 years ago

      Agreed, and it’s rather telling that the Evil Empire is considerably less evil than the least evil of the social media empires. I avoid all of that stuff as much as possible.

      • w76
      • 3 years ago

      I’ve only walked off the job in disgust once in my life, giving no notice, etc., and it was for a company whose major partner was LinkedIn. Those guys would hop in bed with anybody if it’d make them a buck or two.

    • blastdoor
    • 3 years ago

    This acquisition actually makes sense, at least on the face of it.

    It’s certainly a lot more logical than the failed Yahoo bid or the cataclysmic Nokia takeover.

      • DreadCthulhu
      • 3 years ago

      I agree that this makes at least some sense – adding the business social network site to Microsoft’s business/enterprise focused operations should create some actual synergy, and not just buzzword synergy.

      The Nokia deal has just been baffling – MS spent billions to buy a phone company, and then floundered at actually using them to keep pushing out a steady stream of smartphones across the usual price points. They didn’t even get the patents in the deal, either.

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