SOFTWARE GIANT MICROSOFT is buying LinkedIn for $26.2 billion in all-cash takeover of the professional networking outfit.
In Microsoft’s biggest deal to date, the two companies announced they had struck a “definitive agreement” that will still leave LinkedIn with its “distinct brand, culture and independence”.
The professional network’s CEO, Jeff Weiner, will also remain in place, however he will now answer to Microsoft boss Satya Nadella.
LinkedIn chairman and co-founder, Reid Hoffman, who is the company’s controlling shareholder, said in a statement that the deal was a “re-founding moment” for the tech firm.
Nadella said that the LinkedIn team had “grown a fantastic business centred on connecting the world’s professionals”.
Together the two companies could “accelerate the growth” of the network, as well as Microsoft’s own products, to “empower every person and organisation on the planet”, he added. Microsoft plans to mainly use new debt to pay for the deal.
LinkedIn was launched in 2003 and now has more than 430 million users worldwide, although only around one-quarter of that total was active each month, according to the site’s latest figures.
Its revenue was up 35% year-on-year in the latest quarter, however it still delivered a net loss of $46 million.
Earlier this year its share price was savaged, losing more than 40% in a day and slicing its market value to around $15 billion, after it announced a revenue downgrade. It has since recovered about 30% in value, however it’s still worth less than half the peak figure of early 2015.
Both companies’ boards have cleared the deal, however it will still need to be approved by shareholders and regulators.
Repositioning
Since Satya Nadella became Microsoft’s CEO in 2014, Microsoft has been repositioning itself as a services company, with a particular focus on businesses and mobile.
Part of it included its acquisition of popular apps like calendar app Sunrise, productivity app Wunderlist and the keyboard app Swiftkey.
Its focus on iOS and Android meant it has been slowly shedding the remains of its Nokia acquisition, writing off its $7.6 billion acquisition and cutting 7,800 jobs. It plans to cut a further 1,850 jobs by the end of the year.
It also bought Mojang, the creators of the hit game Minecraft, for €2.2 billion. The game is a hit with younger kids and is used in schools as a way of teaching children about subjects like history and geography.
Microsoft has also been pushing its release of Windows 10, which was launched last July. It has been encouraging Windows 7 and 8.1 users to switch by making it a free upgrade for the first year of release.
However, many users have complained about how pushy the upgrade is, with some accusing it of tricking people into installing the update as it approaches the July deadline.
Written by Peter Bodkin and posted on Fora.ie. Additional reporting by Quinton O’Reilly,
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