Dive Brief:
- Microsoft announced on Monday it has reached a deal to purchase LinkedIn for $26.2 billion.
- LinkedIn is expected to "retain its distinct brand, culture and independence," according to the announcement.
- The all-cash deal is expected to close later this year.
Dive Insight:
The business world woke up Monday morning to the news that LinkedIn is being acquired by Microsoft for sizable $26 billion. The deal represents a major milestone for the professional social network, which has grown considerably since its founding in 2002, counting 433 million members, 105 million active users and $3 billion in revenue in 2016.
Where LinkedIn goes from here is the subject of much speculation — and interest for marketers. Many B2B marketers today rely on the platform for a number of services, particularly its professional groups and advertising opportunities.
Microsoft and LinkedIn see a bright future ahead for LinkedIn, which will operate independently but work closely together with its new parent company. Microsoft previously acquired Yammer, an enterprise social network and messaging company, for $1.2 billion in 2012, and tried to buy Slack, another enterprise messaging company. LinkedIn will give Microsoft an even greater foothold in the space — and a strong sales channel to promote its products to business professionals.
In a letter to employees referenced by Marketing Tech News, LinkedIn CEO Jeff Weiner said LinkedIn plans to scale the reach and engagement of its network by powering the "social and identity layers of Microsoft's ecosystem of over a billion customers"; partner with Microsoft on enterprise solutions for business intelligence distribution and collaboration; provide LinkedIn's sponsored content advertisers with the ability to reach Microsoft users; redefine social selling through sales navigator and dynamics; and leverage LinkedIn's subscription functionality for contractors using Microsoft products, according to Marketing Tech News.
For Microsoft, the deal is an example of the company working to diversify its platform and boost market penetration. In the announcement, Microsoft CEO Satya Nadella highlighted the potential growth for LinkedIn and Microsoft Office 365. Microsoft's productivity suite is already the most popular web-based business application. Combined with the LinkedIn's vast professional network, Microsoft will have a major stake in most professionals' working lives.
Beyond being a professional network, LinkedIn also has a large recruiting stake. Earlier this year, LinkedIn launched its "ProFinder" service, which allows customers to find qualified professionals to help them with a specific type of product or service, according to the Business Journals. In its most recent quarterly earnings report, LinkedIn highlighted its expanded membership base and increased engagement. LinkedIn was not profitable, but the platform was generating more cash, according to The Motley Fool.
Weiner will remain in his position and report directly to Nadella, according to the announcement. Following the announcement, the professional network's shares were up 63% in pre-market trading, according to Reuters.
