“Shares in professional networking/dating/narcissism website LinkedIn are called to open around 40 per cent higher at the United States open after confirmation it has welcomed a mammoth takeover approach from Microsoft constituting a nigh on 50 per cent premium over Friday’s share price close”, Eden said.
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LinkedIn will not change much to the consumer’s eye, at least not at first.
“LinkedIn has the most unique pool of data in the social media business because it’s focused on business professionals, so it’s more valuable to B2B-focused businesses”. With 70 million active monthly users, it’s doing well, but that’s still only a fraction of the 1.2 billion total office users.
Jeff Weiner will remain chief executive of LinkedIn, reporting to Microsoft CEO Satya Nadella.
Microsoft’s acquisition of LinkedIn is expected to close by the end of the year.
Reid Hoffman, chairman of LinkedIn’s board and the company’s controlling shareholder, said the deal had his full support. With this new deal, LinkedIn has definitely embraced some change, but the two companies have a huge challenge ahead of them in overcoming increased competition in the professional software market. Microsoft will be able to insert videos of Lynda into its own software applications like Excel spreadsheets.
“Satya said you guys have to help write the rules, you have your independence, we have this shared sense of alignment”, Jeff Weiner, LinkedIn CEO, said.
After news broke that Microsoft (MSFT) is buying the social networking site, LinkedIn stock (LNKD) soared 47 percent to $193, while Microsoft stock briefly tumbled 3.2 percent.
The Microsoft, LinkedIn connection is the latest in a series of recent acquisitions and partnerships by Microsoft.
In a statement, Nadella said: “The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals”.
For Microsoft, the deal will help in its mission of trying to keep services like Outlook email relevant enough that customers won’t want to leave it for competitors such as Google’s Gmail.
But Roger Kay, analyst and consultant with Endpoint Technologies Associates, said it is doubtful Microsoft can use the deal to compete in a world of social networking dominated by Facebook.
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Mary Shea, an analyst at Forrester, agrees that it’s all about the execution, but she says the acquisition fits with the direction Microsoft is taking towards providing software and services to employers as its primary business.
