Monday, 13 June 2016

LinkedIn to be Acquired by Microsoft.

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When Facebook acquired WhatsApp few years back for a very large sum of money it was an affirmation of a dream come true for the inventors of WhatsApp. The WhatsApp deal which was wrapped up for 19 billion dollars expanded Mark Zuckerberg’s business empire and the huge purchase is now paying off even though WhatsApp operations are still run independently. Microsoft has also recently decided to do something similar as the software company has announced interest in acquiring LinkedIn, an online network popular among professionals. The site was launched over a decade ago (around 2003), has about 400 million users of which around 80 to 90 million are active. To make the site more fun so that even visitors that are not looking for employment opportunities will not find it boring, a blogging platform was released two years ago. LinkedIn also expanded its business by purchasing pulse and The former was bought for 90 million dollars three years ago while the latter, a platform for online education was bought for 1.5 billion dollars in 2015.

In the early hours of today, Microsoft disrupted activities relating to shares and announced that it is interested in buying the LinkedIn network for 26.2 billion dollars in cash. Just like WhatsApp remained independent after being bought by Facebook, LinkedIn will continue to operate independently even after the purchase of the professional network which will be finalized by the end of this year. As a result, LinkedIn CEO Jeff Weiner will continue to be in charge of the company. Each share of the company will be bought by Microsoft at the rate of 196 dollars (about 64 dollars more than LinkedIn’s shares last traded at). Though the company had been trading above 200 dollars, an unclear forecast was rendered early this year.
From many indications, it is expected that the deal is going to be successful as even LinkedIn’s major shareholder and co-founder Reid Hoffman is in full support of it. This is reasonable as the amount of LinkedIn shares owned by Reid is equivalent to 2.55 billion dollars. In a recent release, Microsoft CEO Satya Nadella said:

“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals. Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet”.

It is the hope of Nadella and others at Microsoft that LinkedIn will be of far more benefit than the professional network Yammer which was bought for 1.2 billion dollars by the company. Though we are not sure if Microsoft as a whole is completely convinced of LinkedIn’s real worth, the company, judging from the things Nadella stressed, is making effort to gain some grounds in the online networking of professionals.
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