Microsoft announced recently that it will acquire LinkedIn for $26.2 Billion. This transaction will be completed entirely in cash, and values LinkedIn’s shares at $196 per share.
This development comes at a time when both companies are facing growing issues; Microsoft is attempting to cut costs through layoffs and sales, while LinkedIn is facing growing pressure from its competitors who use more software in their products. The acquisition will give Microsoft a key avenue into building more services for enterprises, expanding past its current primary dependence on software and hardware development. Meanwhile, LinkedIn will benefit as it will benefit more from Microsoft’s software development in promoting their products and services online.
LinkedIn will retain a degree of independence after the transaction, as the existing CEO Jeff Weiner will remain CEO, and Microsoft’s admission that LinkedIn is the “world’s leading professional network” means that it is unlikely to interfere with the company’s doings to a large degree, at least at first.
Microsoft’s latest acquisition will certainly be just another in a series of actions to boost its social media presence since its investment in Yammer back in 2012. It would be very interesting indeed to see what will happen with the new merger in the future.