Microsoft recently announced it will purchase LinkedIn for $26.2 billion, its largest acquisition yet. As a point of comparison, Microsoft’s purchase of Minecraft in 2014 was for $2.5 billion. This deal was approved unanimously by the boards of both companies, but still requires the approval of regulators in the United States, European Union, Canada and Brazil.
Microsoft has a history of questionable acquisitions which haven’t always panned out. The purchase of Nokia’s mobile phone division was a particularly disastrous move for the company. Microsoft was forced to sell off assets related to its phone business and lay off thousands of employees after failing to attain significant market share.
However, analysts and Microsoft CEO Satya Nadella believe that this acquisition will be more beneficial to the company some of the previous deals. With this purchase, Microsoft hopes to expand its pool of customers by selling its business-oriented software to professionals on LinkedIn. Nadella also stated that LinkedIn and Microsoft share a mission to help people work together more efficiently and, “There is no better way to realize that mission than to connect the world’s professionals.”
Nadella has stated that Microsoft can make use of its expertise in analytics and machine learning with this deal. Nadella indicated that LinkedIn has an enormous amount of data about its users that can be mined in order to offer automated suggestions and other features that will improve business processes. In an attempt to explain synergies between Microsoft products and LinkedIn he gave the example of a meeting scheduled using Microsoft Outlook calendar integrated into LinkedIn. A person at the meeting might receive a notification that someone else in the meeting went to college with a colleague, which enables another level of connection.
LinkedIn CEO Jeff Weiner will remain with the company which will continue to be operated as an independent unit. Weiner told Reuters that LinkedIn would remain relatively independent of Microsoft in the same way that Instagram is largely independent of its parent company Facebook. However, with the level of integration Nadella has described, it is believed that LinkedIn won’t remain a separate entity for long.
Is this acquisition a good move for Microsoft? Do you think that the partnership will bear fruits for users as well? Leave your comments below.