Microsoft buys LinkedIn: Decoding the deal

June 16, 2016 12:23 pm

A 3D printed logo of Microsoft is seen in front of a displayed LinkedIn logo. (Image: Reuters)

Microsoft Corp announced that it is buying LinkedIn Corp for $26.2 billion in cash earlier this week, which came as a surprise to many. Immediately, the world rushed to make sense of the deal.


The acquisition, set to close before the calendar year, is one of the most expensive in the tech history of acquisitions.


“Together, we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics, as we seek to empower every person and organisation on the planet,” said Microsoft CEO Satya Nadella in a statement.


Meanwhile, LinkedIn will retain its current CEO, Jeff Weiner, and “retain its distinct brand, culture and independence”, a Microsoft statement announcing the acquisition read.


While financial analysts are skeptical of the deal’s figure, given the professional network’s slow growth recently, it was speculated that Microsoft chose not to wait till LinkedIn costs less and the deal is now viewed as part of Microsoft’s efforts to be a viable player in the coming years.


While Microsoft used to be an undefeated tech giant in the past, it now faces strong competition from the likes of Google and Amazon, who proved to have more futuristic visions. Most observers find the deal to be part of Microsoft’s plan to reposition itself in the future of the computing industry.


Moreover, despite its slow growth, many had expected a huge future for LinkedIn, some even grouping it with the much larger social network, Facebook.


This acquisition might shatter big dreams of LinkedIn becoming the size of Facebook for professionals. However, even if it is a disappointment to LinkedIn hopefuls, the network’s shares did jump by more than 48 per cent following the announcement.


AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.