Microsoft has announced today that it will be purchasing social network LinkedIn in an all-cash deal worth $26.2 billion, or $196 per share. Microsoft has since admitted it made a mistake and wrote down the acquisition a year ago for $US7.6 billion.
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After a rocky year, Microsoft announced Sunday night it would purchase the networking site LinkedIn for just over $26 billion in cash.
Nadella also said he thought LinkedIn would be a good fit for Microsoft’s business software packages like Office, helping bring businesses and professionals together to encourage collaboration – which has been a major focus of Microsoft with recent software releases.
LinkedIn CEO Jeff Weiner will retain his job, but report to Microsoft CEO Satya Nadella.
LinkedIn will remain an independently run unit of Microsoft.
The deal was described as a “re-founding moment” by Reid Hoffmann, LinkedIn chairman, who said it was an “incredible opportunity for our members and customers”.
The deal, which won the unanimous support of both boards, is expected to close this year, the companies said. The acquisition is expected to become accretive to Microsoft’s profits by fiscal 2019 or less than two years after the deal is closed.
LinkedIn started out in the living room of co-founder Hoffman in 2002 and was officially launched on May 5 in 2003. Microsoft shares slipped 3.9 percent to $49.48.
What will a LinkedIn integration with Office 365 and other Microsoft cloud products actually look like, and what specific partner opportunities can those combined technologies drive?
LinkedIn stock had a great day of trading, increasing its value by 46.67%. LinkedIn has seen exponential growth in its revenue since 2005, when it started to charge for job listings and premium accounts, thereby enabling employers and staffing agencies to mine its extensive business database. Microsoft’s Outlook.com alone has 400 million active users and Microsoft Office has been downloaded 340 million times on Android and iOS devices, according to Microsoft.
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Mr Nadella said Microsoft had a history of buying businesses and integrating them into the group, ranging from Power Point to the Minecraft game, and Skype. “It’s clear to me that the LinkedIn team has grown a fantastic business and an impressive network of more than 433 million professionals”.
