Reason Why Microsoft Acquired LinkedIn

Today Microsoft Corporation bought LinkedIn Corporation for $193 per stock which equivalents to $26.2 billion. This deal by Microsoft is the biggest in the company’s history.

Satya Nadella, the CEO for Microsoft, seeks to bring new revenue into the company. Due to the fact that Microsoft has Microsoft Office, this deal connects Microsoft with the 433 million professionals who use LinkedIn and expands Microsoft reach in several areas. The CEOs of Microsoft and LinkedIn have claimed that the acquisition of LinkedIn by Microsoft benefits both due to the fact that they share a mission to help professionals around the world. Overall, the potential market size for Microsoft post the acquisition of LinkedIn is 315 billion; prior to the acquisition, the market size potential was 200 billion.

Benefits of the Acquisition

“A great example of the ‘symbiotic relationship’ with LinkedIn and Microsoft is if an employee walks into a meeting scheduled on Microsoft Outlook and one of the people at the meeting attended his or her alma mater they can receive a notification informing them that they attended the same school with the integration of LinkedIn,” said Microsoft CEO Nadella.

Matt McIlwain, a Madrona Ventures portfolio manager, said, “That the future of productivity is around people, identity and data and the relationships.” The purchase of LinkedIn by Microsoft would be very complementary to each other due to the fact that they each have some sort of leverage on people, identity and data and the relationships.

Rise in Stock Price

Right after the announcement of the acquisition of LinkedIn by Microsoft, stock prices for LinkedIn skyrocket by 47% ($192.42) while Microsoft stock prices plummeted by nearly 3%.

The next acquisition that Microsoft hopes to attain is with Twitter. If Microsoft acquires Twitter the shares would most likely rise by more than 5%.

Overall, this merge of LinkedIn and Microsoft will help Microsoft with their social media reach, especially since LinkedIn has more than 400 million users.

The aforementioned information is provided by Marketing Los Angeles. We seek to provide individuals with the latest business news.