Redmond based company, Microsoft has announced that they have reached a buy out deal with LinkedIn, the deal is pegged at $26 billion. For those who do not know, LinkedIn is a social media network just like Facebook, however, it is designed for professionals to meet and do business together. In addition, it serves as a platform for job seekers to get hired by firms and individuals.
Microsoft paid $196 a share, a 50 percent premium on LinkedIn’s $131 closing price on Friday. LinkedIn’s consent to the deal is being attributed to the company’s dwindling revenue in the advertisement business arm of the company as well as the companies tumbling stock prices. As at last year, LinkedIn commanded as high as $270 per share in the stock market. This is no longer the case and company seems to be looking for better options to increase their fortune by partnering with a giant software company such as Microsoft.
For those who are wondering how this acquisition fits in Microsoft’s plans, well we know Microsoft made its mark through the Windows Operating system for PCs and that their foray into the phone space was largely unsuccessful. Microsoft also got their office 365 suite products and are gradually moving their office 365 service to the cloud as well as other cloud computing services they now offer. Microsoft plan to expand or according to them ‘change’ the way people get hired and do business’ – obviously they are positioning themselves as dominators of the software and cloud service space; other than this, Microsoft has not revealed any other plans for their new acquisition. In time, we will know what the Redmond based companies plan. For now, LinkedIn is still going to be managed by its current CEO, Jeff Weiner, so do not panic for whatsoever reason as the social network will still work on the principles it was founded on. However, Jeff Weiner will be reporting to the Microsoft’s CEO, Satya Nadella. The acquisition is for the most part complete, however, Microsoft and LinkedIn are yet to receive regulatory approval.
So that is all we have on the new acquisition, do you think this will have negative or positive effect on LinkedIn judging by companies Microsoft have acquired in the past?