There are big things going down at Microsoft this morning.
In a surprise move, the tech company announced that it has acquired the social network vendor LinkedIn for $26.2 billion, or $196 per share, in cash.
Even though the transaction is set to go forward, with it already being approved by both boards, LinkedIn will be keeping its branding, and will become a part of Microsoft's productivity and business processes segment. LinkedIn's CEO Jeff Weiner will report to Satya Nadella.
Here is some of what Nadella, Microsoft's CEO, had to say about the deal:
"The LinkedIn team has grown a fantastic business centered on connecting the world's professionals. Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet."
Jeff Weiner chimed in about the deal and mirrored that enthusiasm:
"Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn's network, now gives us a chance to also change the way the world works. For the last 13 years, we've been uniquely positioned to connect professionals to make them more productive and successful, and I'm looking forward to leading our team through the next chapter of our story."
Indeed, this deal means big things for both parties involved.
For Microsoft's part, it finally allows the tech company to fully implement its strategy of building more services for enterprises. As of late, Microsoft has placed most of its efforts on software rather than hardware in the form of its downsized phone business. LinkedIn gives Microsoft an actual platform to stand on, granting it a greater reach through its professional content and social networking services.
LinkedIn, on the other hand, will finally be able to compete with other companies that have been building more software on top of their social graphs, that puts them in closer competition with LinkedIn, on even ground. For what it's worth, the social network has made attempts to make moves to counter this, but a recent falloff in user and revenue growth effectively stymied such attempts. Now, with Microsoft on board, it could focus its efforts on what it does best, while Microsoft handles the rest.
This deal represents the highest-valued deal since Nadella became CEO, and is expected to close before the end of this calendar year.
