The second biggest deal of Microsoft acquiring LinkedIn costs $26.2 billion. This is the sixth acquisition of Microsoft in the year 2016, which is the biggest deal if the tech giant out of its 196 acquisitions. Microsoft plans to influence 433 million users of LinkedIn in order to expand its business but this is not the only motive, there are a lot more reasons for this historic deal in between the two giants. Microsoft CEO, Satya Nadella finds this deal as joining hands of the world’s leading professional cloud and network.
Before joining hands with any acquisition Nadella asks three key questions.
- Will the asset expand Microsoft’s overall addressable market?
- Is the asset riding technical trends and secular usage?
- Will the asset able to align with company’s core business and and sense of overall purpose?
He defended the answer to all these questions is squarely yes with LinkedIn. Nadella shared his views on why Microsoft-LinkedIn deal made sense to him.
For Office 365 and Dynamics
LinkedIn is a professional network where people find jobs, build skills, sell and market and in the end get success. Office 365 and Dynamics will provide a vibrant network which will bring together a professional’s information on LinkedIn’s network as well as in Office 365z
New opportunities to monetize
This combination will provide new experiences like newsfeed and Office suggesting an expert to get in touch via LinkedIn to help them with a task that they are stucked with. The more this combination will be delightful the more their engagement will grow.
With this new ways can be created for monetization when individuals and organizations will subscribe.
The CEO’s of Microsoft and LinkedIn together believe that Microsoft can give acceleration in the growth of LinkedIn. Microsoft’s features may bring a great value to LinkedIn’s users. Founder of LinkedIn, Reid Hoffman, calls this as “re-founding” deal for LinkedIn to reach the goal set 13 years ago for the company.
Growth of Office 365 continues
Microsoft moved Office from productivity tools set to a cloud service for any platform and device. This deal will move Office 365 and Dynamics more upwards by connecting them to world’s largest professional network.
Aligning LinkedIn growth with Microsoft’s vision
Nadella says this deal will mainly accelerate LinkedIn’s growth. Through this LinkedIn can retain its distinction of brand and independence. Jeff Weiner will remain the CEO of LinkedIn and join the senior leadership team of Microsoft. As reported Nadella says, this deal will keep the team of LinkedIn to focus on driving results and along with this integrating plan with Office 365 and Dynamics team.
In process with this integration Microsoft will also choose other projects too so that new features for customers experience can be included.
In a match being made for the cloud, the software giant Microsoft is acquiring a professional social networking site Linked In for $26.2 billion in cash. By teaming up, the companies aim to connect the Microsoft’s more than 1.2 billion users of Office — and the other cloud-based offerings —with the LinkedIn’s 433 million-plus mobile-friendly members in ways that transform the workplace. The LinkedIn’s news feed will be smarter for our Microsoft Office calendar will know what’s coming up on our schedule, said the Microsoft CEO Satya Nadella.
The Office software suite will have Linkedin’s training courses in the programs such as an Excel, Word and the PowerPoint baked in, he said. In a more futuristic vision, the Nadella foresees Microsoft’s artificial intelligence assistant Cortana serving as our networking caddy. “Imagine you are walking into a meeting and the Cortana now wakes up and tells you about the people you are meeting for the first time and also tells you all the things you want to know before walking in and knowing someone because it has an access to the professional network,” as he said.
The Microsoft likely sees the potential of connecting an Office Graph and The intelligent workplace collaborative platform with the LinkedIn’s network, says TJ Keitt, a senior analyst with the research firm the Forrester. “This is the data play in many respects. In an enterprise market, the Microsoft wants to create a new platform for work that makes it an easier for the employees to collaborate and get things done,” he said.
While the Microsoft is paying the premium for the Linked In, a software giant should gain from an acquisition, says the Mizuho Securities analyst the Neil Doshi. “This transaction makes a sense to us. We’ve always considered the two potential Acquirers for Linked In – the Salesforce or the Microsoft,” he said in a note to investors. The deal does not only help the Microsoft in an office, but also on the social media, he says Microsoft has fallen behind in the consumer Internet sector, and this deal gives the Microsoft 433 million social Linked In members that are growing.
Doshi also said that Just as an important, 60% of the Linked In users are on the mobile, and this should accelerate the Microsoft’s consumer ‘Net mobile presence” in the market. As for the Linked In — besides the hefty payout — it stands to expand its recruiting, advertising and the sales programs through the Microsoft’s extensive business and its consumer connections. The Outlook.com of Microsoft alone has the 400 million active users and the Microsoft Office has been downloaded 340 million times on an Android and a iOS device, according to the Microsoft.
The companies said that their respective boards had also unanimously approved the deal. The Linked In CEO Jeff Weiner will keep the title and report to the Microsoft Nadella.