Computer software giant Microsoft Corporation announced on Monday that it will acquire business-oriented social networking service LinkedIn Corporation for 26.2 billion U.S. dollars, to seek new growth opportunities for its business productivity tools.
Under a definitive agreement, Microsoft, once the world's No. 1 software giant for personal computer (PC) and now a multinational technology company, headquartered in Richmond, Washington, will buy LinkedIn, based in Mountain View, California, for 196 dollars per share in cash and the transaction is expected to close this year.
In Microsoft Chief Executive Officer (CEO) Satya Nadella's words, the deal, the biggest since he assumed the position in early 2014, is to bring together the world's leading professional cloud with the world's leading professional network.
Microsoft, which has moved its Office application suite from a set of PC productivity tools to a cloud service known as Office 365 and now has 1.2 billion users, finds a connection with LinkedIn, which runs an online network connecting more than 400 million professionals worldwide.
"We are in pursuit of a common mission centered on empowering people and organizations," Nadella explained in an email to employees. "Along with the new growth in our Office 365 commercial and Dynamics businesses, this deal is key to our bold ambition to reinvent productivity and business processes."
Microsoft Dynamics offers businesses an integrated productivity solution.
Nadella said when people find jobs, build skills, sell, market and get work done, they need a connected professional world which brings together a professional's information in LinkedIn's public network with the information in Office 365 and Dynamics.
About LinkedIn's growth and strength, Microsoft listed a number of parameters registered in the past year:
-- 19 percent growth year over year (YOY) to more than 433 million members worldwide;
-- 9 percent growth YOY to more than 105 million unique visiting members per month;
-- 49 percent growth YOY to 60 percent mobile usage;
-- 34 percent growth YOY to more than 45 billion quarterly member page views;
-- 101 percent growth YOY to more than 7 million active job listings.
"The LinkedIn team has grown a fantastic business centered on connecting the world's professionals," Nadella said.
Microsoft was founded by Bill Gates and Paul Allen in 1975. Over years, it has been dominating the PC operation system market, with DOS in the mid-1980s and Windows since mid-1990s. However, as the world goes mobile and PC market shrinks worldwide, Microsoft has been working hard to catch up the trend and keep itself relevant. It reported 93.58 billion dollars in revenue in 2015.
Linkedin was founded in 2002. As of 2015, most of the company's revenue, reportedly 2.99 billion dollars, came from selling access to information about its users to recruiters and sales professionals.
The transaction between the two has been approved by the boards of directors of both LinkedIn and Microsoft.
As part of the deal, Jeff Weiner will remain CEO of LinkedIn and report to Nadella, while LinkedIn will retain its brand, culture and independence.
"Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn's network, now gives us a chance to also change the way the world works," Weiner said. "For the last 13 years, we've been uniquely positioned to connect professionals to make them more productive and successful, and I'm looking forward to leading our team through the next chapter of our story."
