Home What's Brewing? Buying LinkedIn, Microsoft Is Undisputed Leader in Professional Data

Buying LinkedIn, Microsoft Is Undisputed Leader in Professional Data

DRAFT_–_MICROSOFT_CONFIDENTIALMicrosoft will acquire the professional social network LinkedIn for $196 per share in an all-cash transaction valued at approximately $26.2 billion (including LinkedIn’s net cash).

LinkedIn CEO Jeff Weiner will report to Microsoft CEO Satya Nadella and join Microsoft’s Senior Leadership Team. Reid Hoffman (LinkedIn’s chairman of the board, co-founder and controlling shareholder), has given his full support for the transaction, which the LinkedIn Board recommended unanimously. Microsoft says that LinkedIn will retain is distinct brand, culture and independence.

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Microsoft and LinkedIn share a common mission centered on empowering people and organizations. LinkedIn counts 433M+ members in 200+ countries and has 105M+ monthly active users (MAU), 9M+ company pages,  7M+ active job listings and 2M+ paid subscribers.. Microsoft has 1.2B+ Office users and 70M+ Office 365 commercial MAU.

The goal of the merger is to drive increased engagement across LinkedIn as well as Office 365 and Microsoft Dynamics while accelerating monetization through individual and organization subscriptions and targeted advertising.  By connecting the world’s leading professional cloud and professional network, the companies hope to create more connected, intelligent and product experiences.

How can Microsoft and LinkedIn reinvent ways to make professionals more productive? 

• The combined entity foresees how a professional profile can now be unified so that, instead of scattered data at multiple endpoints, accurate data can be surfaced in an app, whether Outlook, Skype, Office or elsewhere.

• A unified newsfeed can become the place to go for every professional to stay connected with happenings in the network, industry, and professional.

“This combination will make it possible for new experiences such as a LinkedIn newsfeed that serves up articles based on the project you are working on or Office suggesting an expert to connect with via LinkedIn to help with a task you’re trying to complete,” said Nadella. “As these experiences get more intelligent and delightful, the LinkedIn and Office 365 engagement will grow. And in turn, new opportunities will be created for monetization through individual and organization subscriptions and targeted advertising.”

• A digital assistant like Cortana will be able to connect the dots between you and your professional network so you stay a step ahead.

• Users of Dynamic CRM and other CRM systems will want to directly connect with LinkIn Sales Navigator, moving to a new mode of “Social Selling.”

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LinkedIn can utilize Microsoft’s field and distribution channels to reach new audiences and more customers, gain access to Microsoft’s scaled cloud infrastructure and technology stack and provide a new level of richer professional search inside of Bing.

The acquisition also means that Microsoft is acquiring not  just a social network but a workplace social graph that rivals Facebook and Google. While Microsoft acquired Yammer nearly four years ago, and bought Skype for $8.5 billion back in 2011, both of those acquisitions have been integrated more tightly into Microsoft’s Office business. 

The LinkedIn acquisition positions Microsoft as the leader in data on the professional world — both at the organizational and individual levels.  In terms of advertising revenue (that which drives Facebook and Google) the deal potentially offers marketers three things according to MarketingLand: 1. More refined targeting, particularly for B2B advertisers; 2. More reach with the addition of the LinkedIn universe of 433 million users; and 3. More commercial opportunities via Cortana as it is positioned as “the professional’s” digital assistant.

The two companies plan  to obtain regulatory approval in the United States, the European Union, Canada and Brazil before closing the transaction.  If for some reason the deal does not go through, LinkedIn will have to pay Microsoft a $725 million termination fee, according to Microsoft’s SEC filing detailing the merger. [24×7]