The internet was abuzz with the news on Monday this week that Microsoft has signed a deal to buy LinkedIn for a huge $26.2bn which is up there as one of the biggest tech deals in history. There is a lot of noise around this deal, with some experts unable to understand the reasoning behind the purchase.
Linkedin’s share price is already soaring by 50% which is a welcome turnaround of recent times where it had fallen to an unprofitable amount. This may be the turnaround that the social media platform needs.
Microsoft’s CEO, Satya Nadella, discusses the sale in a letter to his employees. He says;
“This deal brings together the world’s leading professional cloud with the world’s leading professional network. I have been learning about LinkedIn for some time while also reflecting on how networks can truly differentiate cloud services. It’s clear to me that the LinkedIn team has grown a fantastic business and an impressive network of more than 433 million professionals.
Given this is the biggest acquisition for Microsoft since I became CEO, I wanted to share with you how I think about acquisitions overall. To start, I consider if an asset will expand our opportunity — specifically, does it expand our total addressable market? Is this asset riding secular usage and technology trends? And does this asset align with our core business and overall sense of purpose?
The answer to all of those questions with LinkedIn is squarely yes. We are in pursuit of a common mission centered on empowering people and organizations.”
He explains that the reasoning behind the deal is that both businesses are built on connecting professionals and improving business processes. He even suggests how the relationship will move forward, with new experiences for both LinkedIn and Microsoft users. Your new LinkedIn newsfeed could serve up articles based on a project you are working on, and Office will be able to suggest experts to connect with on LinkedIn. The below infographic shows how the acquisition can benefit professionals and how they both complement each other for clearer messaging and targeted advertising.
There was even a hint of what was to come in a visual format – a new Intelligent Newsfeed which will unify data ‘for every professional to stay connected with the happenings in their network, industry and profession’. Cortana, Microsoft’s digital assistant will also be able to give you more information on your connections based on your LinkedIn relationship.
However, there are many people on Twitter unable to fathom why this deal happened at all. It will be fascinating to watch it all evolve, and experience how the deal with advantage us, from either perspective.
Let us know your thoughts by tweeting us @Cosmic_UK.