In one if the biggest tech deals, Microsoft said that it’s buying the professional social network LinkedIn for a whopping $26.2 Billion.
Microsoft is paying $196 per share in an all-cash deal. That’s 50% more than LinkedIn stock’s closing price last Friday.
Microsoft plans to use LinkedIn as a database of professional information and distribution channel for its software systems. LinkedIn gains additional financing and access to millions of people who could potentially join its network.
“It’s really the coming together of the professional cloud and the professional network,” Mr Satya Nadella, CEO of Microsoft said in an interview on Monday.
This is Microsoft CEO Satya Nadella’s first big acquisition since he took over the top job more than two years ago. It’s clear this is a big acquisition for Microsoft, both in terms of cash value and what LinkedIn brings to the company. More than 433 million people use LinkedIn worldwide to network, find jobs, and reconnect with old colleagues. Many of those LinkedIn users also pay for premium services to use the site.
Microsoft has bought its way into new businesses before, though most of its largest deals have not turned out well. In 2014, it paid nearly $9.4 billion for the smartphone operations of Nokia and some years earlier spent more than $6 billion for aQuantive, an internet advertising company, but ended up writing off most of the value of those deals after they performed poorly.
With the merger, Microsoft will also own the training video platform Lynda,com which LinkedIn bought for $1.4 Billion last year. Microsoft will be able to offer Lynda’s videos inside its own software, such as Excel spreadsheets.
