Microsoft is set to purchase LinkedIn for marketing purposes

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  • 5 years ago
  • Posted: June 15, 2016 at 12:48 pm

Microsoft has announced a $26.2 billion deal on Monday to acquire professional social platform, LinkedIn for $196 per share. The surprise announcement was met by some arched eyebrows, a recognition of Microsoft’s history of big deals gone sour like the recent $7.9 billion purchase of Nokia’s handset business. Two years after the deal, Microsoft has taken more than $10 billion in restructuring charges and write downs  laying off the vast majority of the staff that came from Nokia.

Microsoft Corporation, which went public in 1986, is arguably one of the most profitable American businesses in U.S. history. Microsoft has in over time given a rough time to its competitors with its ability to crush them down in the market and has continued to deepen its dominance in software development, Internet technology, cloud computing, mobile communications and media with strategic mergers and acquisitions. The company owns some of the major top performing and profitable sites known and used worldwide. For example:

  1. Yammer

Microsoft acquired Yammer for $1.2 billion cash from David Sacks, the founder. Yammer is an enterprise collaboration service that allows businesses to create their own private online social network for members of their organization. Simply an organizations that use Yammer are given a central system for internal communication and collaboration.

  1. Skype

Microsoft acquired the entire company in May 2011. The total value of the transaction was $8.5 billion and it is to date Microsoft’s largest acquisition. Currently, according to Microsoft’s website, “Skype users make up to 3 billion minutes of calls each day.

  1. Bing

Bing is one of the most used search engines in the world. It is also one of Microsoft’s most important subsidiaries.

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4.Office 365

In June 2011, Microsoft entered the cloud computing sector with the release of this online productivity. The service is sold to both individuals and organizations through either a monthly or annual subscription.

5 Xbox

Founded in 2001, Xbox is a video gaming business created by Microsoft. Under the Xbox brand, Microsoft sells a range of gaming consoles including the Xbox and the Xbox 360

Microsoft Corporation so far has had a terrible competition from the other popular performing companies in the technology sector.  Microsoft Corporation’s primary competitors include some of the most prominent technology companies in the industry such as Apple, Google, SAP, IBM, and Oracle among others .Microsoft being a diversified corporation that offers many types of products and services, the company faces stiff competition from successful software corporations in the world such as oracle and the German firm SAP, which compete directly with Microsoft for the lucrative business services market. The extremely popular Windows operating system is perhaps the most prominent Microsoft product. In this area, the company competes with a number of smaller firms, such as Red Hat, that distribute open-sources operating systems such as Linux.

Microsoft intends to pocket LinkedIn founder Reid Hoffman $2.9B in their deal, and since he owns enough stock, he has the ability to approve it. Actually LinkedIn is a business-oriented social networking service. Founded in December 14, 2002, and launched on May 5, 2003, with its main purpose being professional networking. As of 2015, most of the site’s revenue came from selling access to information about its users to recruiters and sales professionals. As of March 2016, LinkedIn has had more than 433 million users.

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By teaming up, Microsoft will be able to connect LinkedIn’s 433 million-plus mobile-friendly members in ways that transform its office platforms. Microsoft likely sees the potential of connecting its Office Graph intelligent workplace collaborative platform with LinkedIn’s network in to create a new platform for work that makes it easier for employees to collaborate and get things done in the enterprise sector.

In announcing the deal to buy LinkedIn, Microsoft is reaffirming that the company’s next act will be as a builder of software that makes other businesses tick.Microsoft’s wants to extend its workplace to focus on social networks. Keeping in mind the 2012 $1.2 billion Yammer deal. LinkedIn has the ability to bolster Microsoft’s services like Office and software for salespeople. The deal not only helps Microsoft in the office, but also on social media by giving Microsoft 433 million social LinkedIn members. This will greatly impact the entire Microsoft company positively.Integrating the LinkedIn data links into many of Microsoft’s products may help boost the company to greater membership.

Perhaps more important Microsoft will be able to interact with the many companies that uses LinkedIn to find job candidates or manage their human-resources data by providing social fabric which I think is going to be so important in this network economy. The data could also help Microsoft reach an overarching goal of understanding how people work and how its software can help them work better. In order to create intelligence in its services, Microsoft requires a corpus of how people work. Which of course they will be able to find it on the professional platform.

LinkedIn might fit within Microsoft’s range of software. Microsoft’s Office suite has 1.2 billion users of programs from email to documents, but little social connective tissue between them. LinkedIn’s tools could fill that gap, becoming a default workplace profile.The Microsoft’s digital personal assistant reminding someone about an upcoming meeting will pull in data from LinkedIn to inform them of their shared connections or work history.

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The software company intends to make LinkedIn more easily accessible in Microsoft’s slate of programs. One of the most important pieces of the acquisition might be the effects on Microsoft customer-relationship management software Dynamics. The integration could allow Dynamic users to easily see their connections and their current status; the acquisition could further help Microsoft get to the heart of the people doing work.Microsoft has also been looking for ways to get more people to use their cloud apps like Office 365, Skype and Cortana.This goal might be achieved immediately the deal is done. 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 deal and consequently  jeopardizing  rival bidders emerge and tough competitors paving clear way for Microsoft to lead in the technology market

The deal, approved by both companies’ boards, is expected to close this year. However LinkedIn’s independence might continue, with the team vast majority of jobs staying nearly exactly the same as they have been up to according to the agreement.

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