Microsoft + LinkedIn @ $26.2 billion cash!

This is big news this morning – Microsoft buying LinkedIn at $26.2B cash. LinkedIn’s stock is soaring by 47% as we write while Microsoft stock is falling! This is one of the biggest acquisitions since Dell’s acquiring EMC few months back. So how does this work?

Well, Satya Nadella explains the importance of a professional network in their scheme of cloud offerings, from Office360 to Dynamics. Imagine walking to a meeting and viewing all the attendees info from their LinkedIn profiles. He said, “It helps us differentiate our CRM product with social selling. It helps us take Dynamics [Microsoft’s suite of business management software] into new spaces like human capital management with recruiting, and learning, and talent management.”

LinkedIn had a bad quarter and the stock was going south by as much as 40%. So there was some anxiety on where the company was heading in future. They saw this opportunity to be part of a larger company and the board quickly jumped into this offer, as it seems. As far as the synergy is concerned, time will tell how they integrate and make it look like a seamless cloud offering. Reid Hoffman, chairman of LinkedIn will stay as an advisor, but his new role is yet to be defined. Jeff Weiner will continue to stay as CEO reporting to Nadella.

This certainly strengthens Microsoft’s cloud presence and adds value to the Dynamics business more than the Office360 side. But use of Office360 suite in creating and managing documents/profiles may add to the growth of that business. If they can make it a success, Satya Nedella’s leadership will have a new feather in his cap.

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