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Sunday, July 17, 2016

MICROSOFT BUYS LINKEDIN


In what can be considered the largest acquisition price paid in the company’s entire history, pioneering tech company giant Microsoft announced yesterday that it has snapped up the business- geared social networking system LinkedIn, with a deal expected to be finalized by the end of the year.

In a June 13 news article on their corporate website, Microsoft reported that they have acquired LinkedIn at $196 per each of its shares, a 50% premium to LinkedIn’s Friday closing price, for an all-cash transaction amounting to a whopping $2.62 billion, including the social networking system’s net cash. It is the biggest ever corporate deal yet entered into by Microsoft, and CEO Satya Nadella, hopes their new subsidiary will help make the venerable software brand a continuing juggernaut in next-gen computing.

For their part LinkedIn will, according to the Wall Street Journal, retain its distinct branding and company culture, along with its CEO Jeff Weiner. The definitive agreement is seen by both sides as coming down sometime in late 2016, to the agreement of their respective boards. In the wake of the acquisition, LinkedIn shares shot up to 47 percent value while Microsoft’s went down 3.2 percent. Reuters.com reported that a practical application of the acquisition is to connect widely-used Microsoft Office programs like Word and PowerPoint to LinkedIn’s professional user base of 433 million people. In such a combination Microsoft could develop a new program suite of sales, marketing and recruiting services alongside its core product stalwarts, shaping up to challenge rival companies using Cloud software. Thus, connecting Microsoft Office to LinkedIn will enable, say, business meeting attendees to learn more about one another through invites in their network calendars, or users of Microsoft Dynamics can receive useful potential customer info via data from LinkedIn.

In a conference call with business analysts, CEO Nadella pointed out, “LinkedIn and Microsoft really share a mission of helping people work more efficiently. There is no better way to realize that mission than to connect the world's professionals.” 

The new connection has been seen as an acid test in how the software giant will be able to sync a large acquisition like LinkedIn with its own operations. Its previous big buy-up, 2014’s Nokia Corp.’s handset business under previous CEO Steve Ballmer, have proven to be troublesome. Nevertheless, a number of business leaders are all looking forward to the positive benefits of the Microsoft-LinkedIn. Analysts are also of the opinion that no other company will contest the bid due to the all-cash value of the transaction.

Photo Credit to cambiarnews.com

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