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Why did Microsoft buy LinkedIn?

By Hanan Azhar

The biggest acquisition of the year in the tech world just occurred a few days ago when Microsoft bought LinkedIn for a whopping $26.2 Billion. With such a hefty price tag, there has been plenty of criticism of the deal and many believe Microsoft trying to enter the social networking industry may backfire. All of this makes sense considering the company’s past tech acquisitions and attempts (anyone remember when they bought Skype?), along with the fact that almost 80% of M&A’s fail to deliver what they initially promise, but this time around, it could actually be different.

 

There is little operational overlap between the two companies and they are two different entities altogether. Yet, they have complementary, even converging, strategies. This means jobs cuts could be minimal, and that LinkedIn can remain independent inside Microsoft, as WhatsApp and Instagram have been within Facebook. LinkedIn could give Microsoft’s productivity software the social-network piece it’s always lacked, while Office and Outlook could make it easier to keep your LinkedIn profile updated. The core idea is to draw on more data to boost productivity and make both LinkedIn and Microsoft more essential to the workday.

 

While explaining the deal to his employees, LinkedIn CEO Jeff Weiner wrote, “You might feel a sense of excitement, fear, sadness, or some combination of all of those emotions. Every member of the exec team has experienced the same, but we’ve had months to process.” Only time will tell what the future holds for LinkedIn, but with Microsoft’s resources backing it up, it’s definitely here to stay.

Filed in: Tech Updates

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