Microsoft to buy networking site LinkedIn for $26.2 billion

Microsoft has just announced that it’s taking over LinkedIn business social networking service for $26.2 billion (€23.2 billion), and the transaction is expected to close this calendar year.

“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals”, Microsoft CEO Satya Nadella said in a statement.

After Microsoft bought Yammer in 2012, it integrating a host of Yammer capabilities into Office 365 and we may see the same thing from the LinkedIn deal.

LinkedIn shares soared 47 per cent to $193.36 in morning trading Monday.

LinkedIn, which enables members to connect with similar-minded professionals and facilitates job hunting, has some 433 million members worldwide.

Despite the rich premium paid by Microsoft, LinkedIn is selling for well below its peak of more than $270 per share in 2015, but a weak forecast earlier this year sent its shares tumbling amid slowing online ad revenue. You can see how Jeff Weiner, the CEO of LinkedIn, and I envision the opportunity ahead in this public presentation.

The $26.2 billion deal would be the third biggest merger or acquisition of 2016, according to Dealogic, behind the billion merger in January of pharmaceutical companies Baxalta and Shire (SHP).

After the deal, LinkedIn will become part of Microsoft’s productivity and business processes unit.

Microsoft in a blog post said, “The transaction has been unanimously approved by the Boards of Directors of both LinkedIn and Microsoft”.

Based in based in Mountain View, California, the site officially launched in May 2003, boasting just 4,500 members after its first month.

The acquisition “gives Microsoft a great way to keep a pulse on what business users are doing on the web and how they may use certain tools and products”, he added.

“Microsoft CEO Satya Nadella tweeted, “.@Microsoft & @LinkedIn: “world’s leading professional cloud + world’s leading professional network”.

“For the last 13 years, we have been uniquely positioned to connect professionals to make them more productive and successful, and I am looking forward to leading our team through the next chapter of our story”.

For Microsoft, the deal is an example of the company working to diversify its platform and boost market penetration.

Reid Hoffman, the cofounder and chairman of LinkedIn who is also the company’s controlling shareholder, will get $2.9 billion for the sale of his shares.

Jeff and I both believe we have a significant opportunity to accelerate LinkedIn’s growth and the value it brings to its members with Microsoft’s assets and scale.