News Report: Update on LinkedIn
By Chloe Hodge | @chloekhodge
This past Monday, Microsoft announced that it will purchase professional networking site LinkedIn for $26.2 billion. The purchase, which will make history as Microsoft’s largest acquisition ever, has drawn immense praise as well as substantial skepticism from many experts and analysts.
According to Microsoft CEO, Satya Nadella, the acquisition satisfies three key factors he considers when looking to purchase another company:
- It helps Microsoft expand its market.
- It enables the company to join a trend that increases engagement with its users.
- It provides an opportunity for Microsoft to uniquely differentiate its business.
The two companies predict saving around $150 million per year by 2018.
The multi-billion dollar purchase has been met with an array of mixed opinions.
Victor Anthony, Managing director of Axiom Capital Management, believes the purchase will provide strong growth opportunities to both businesses. Anthony especially noted the potential benefits for LinkedIn under Microsoft’s financial backing.
Despite optimistic predictions such as Anthony’s, some remain skeptical of the transaction. An analyst at S&P Global Capital believes the acquisition is a “large deal at a premium” with a lot of work still to be done.
In a recent article, Forbes’ Peter Cohan wrote that the decision was simple to understand, but “difficult to remedy”. He continued by pointing out that,
“There is no scenario I can envision in which the combined companies will be better off. While I have no doubt that Microsoft will try to use the 433 million people who have their profiles on LinkedIn to sell them software and services, there is no reason to believe that Microsoft has the strategic skills needed to revive LinkedIn’s growth.”
Microsoft has a vision of how it will incorporate the two different businesses. Though LinkedIn and Microsoft operate differently, both cater to a predominately professional market. Because of this similarity, Microsoft will fully acquire the social-networking company.
According to a news release, LinkedIn will retain its own distinct brand and culture, with Jeff Weiner retaining his position as CEO. Weiner will report to Nadella.
Not quite sure how to optimize your LinkedIn? Give us a call at 469.248.0616!