Microsoft said on Monday it had signed an agreement to acquire the professional social network LinkedIn for 26.2 billion dollars.
“The LinkedIn team has developed a fantastic business focused on connecting professionals the world, “said the CEO of Microsoft, Satya Nadella.
” Together, we can accelerate the LinkedIn growth as well as the Microsoft Office 365 and Dynamics in order to strengthen each person and organization planet. “
according to a joint statement, LinkedIn will keep your” brand, culture and independence, “with Jeff Weiner as executive director.
the two companies announced that they have reached a “definitive” agreement to be completed by the end of the year, with the support of the president and largest shareholder of LinkedIn, Reid Hoffman.
LinkedIn, which allows its members to connect and facilitates the search jobs, has 433 million users worldwide.
the purchase of LinkedIn is one of the largest ever undertaken in the technology sector and comes at a time when Microsoft moves away more and more of his absolute dedication to software and wants to expand its growth.
LinkedIn gained ground as a social network with its own identity and quite different from its competitors, as it was designed strictly for professional use.
LinkedIn lost nearly $ 46 million last quarter and in 2015 lost 166 million dollars, which caused a drop of its shares since the beginning of the year.
The agreement reflects Microsoft’s new focus, formed by business services and cloud services (virtual servers), Nadella said in a message to employees.
“It is essential to our bold ambition to reinvent productivity and business processes, “he added.
in a later conference call, Nadella has identified a number of ways in which the two companies can work together.
Each company has data of its users (graphs) that can complement with each other. Microsoft has data such as contacts and calendars, while LinkedIn has biographical and professional information of its users.
“If these two ‘graphs’ join comes the magic,” Nadella said, adding that Microsoft you can use this data with your virtual assistant Cortana and artificial intelligence.
“Imagine that you address a meeting and Cortana tells you about who will be present because accessed the professional network,” he explains.
Smart or late?
Analysts are divided on whether Microsoft is or is not doing a good business.
The agreement “is very clever” and is a bet for the future. “The key is the ‘graphs’ social,” said Benedict Evans analyst, who believes that this information will be critical to the future of communications over the next decade.
Jack Gold of J. Gold Associates said the LinkedIn “is highly complementary to Microsoft services” as Skype for business and Yammer.
With the purchase, Microsoft can better understand business and business relationships of the web, in addition to seeking the ways users can use certain tools and products, he said.
“This capability will give Microsoft a huge knowledge about which products to launch in the future and how to release them,” he added.
Roger Kay, an analyst and Endpoint Technologies Associates consultant, said he doubted that Microsoft could use the agreement to compete in the social networking world dominated by Facebook.
“It does not help compete with Facebook, “he said. “LinkedIn does not play in the same league as the Facebook,” he added.
“It is extraordinarily expensive,” he added. “There is no way to take 26 billion dollars on LinkedIn,” he said.
For Trip Chowdhry analyst, Microsoft has learned nothing from their failures here.
Microsoft “arrived late to (devices) mobile “, with the purchase of phone division of Nokia and” failed bitterly, “he said.
Chowdhry added that using Skype has only fallen since it was purchased by Microsoft.
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