Microsoft to buy LinkedIn with huge transaction

Linked In is a social networking site that links the professionals in various fields. It came into existence in December, 2002 and was officially launched for public in May, 2003. It works mainly as a professional networking site.
In 2016, it has around 430 million registrations worldwide of which around 105 million are active. Main source of revenue for the site is the sale of user information to the recruiting agencies and sales teams.
Given the presence Linked In has among the professionals, it would indeed be a great asset for Microsoft. Microsoft has been quite unsuccessful in the social networking sphere. It has tried several ways to boost its presence in the genre, but has not tasted success. It may be remembered that it even invested in Facebook during its initial stages. Though Microsoft has not come clear on the exact purpose for which it will use this acquisition, but more than likely the scope would be on improving its social networking presence. Competitor Google has been quite successful with its Google Plus service. Microsoft may attempt to give as much competition to Google as possible.
Apart from that, there are many Linked In acquisitions which may bolster Microsoft's business. Lynda is one such company which provides online tutorials for the professionals. It has courses for almost all types of topics. Microsoft may be able to use those in its Excel spreadsheet solutions.
The powerful 430 million user base will provide Microsoft the much required social graph. Besides, a well integration between Microsoft Office and Linked In help you get assistance on the project you are working on from an expert on Linked In.
Microsoft could also be planning to use Linked In to make Cortana more useful at your workplace. Connecting Cortana to Linked In may be a huge step forward.

In fact, the deal is beneficial for linked in as well. Both Microsoft and Linked In have been catering to saturated markets. It has its stocks tumbling over the last one year. The decelerating growth graph can see the day of light with this acquisition. For Microsoft, it is an attempt at reinventing itself from a software firm to a company selling business technology solutions.
Microsoft has been recently shifting its business strategy. Acquisition of Linked In will complement this strategy. Microsoft can integrate the newsfeed from Linked In into its Office 365 user interface. This newsfeed will let the Office users keep track of the latest developments while working on their presentation or spreadsheet solutions. Linked In data may also be useful for the CRM - Customer Relationship Management programme by Microsoft labelled Dynamics.

Having seen all those points, it is quite evident that the deal is definitely worth it for both the partners. We just need to see whether Microsoft will be successful in making the deal reach its proper culmination. Seeing the way most of the deals by Microsoft in recent years ( the latest being the acquisition of Nokia) have taken shape, I just hope at least this time, MS will succeed.

LinkedIn released in 2002 (December 2) and listed in NYSE in 2009. It was purchased by Microsoft for $26.2 billion USD.

LinkedIn is not just recruitment and human resource portal. It is the company with portfolio of 16 other companies. It has over the years acquired many other small companies. Such companies list includes - lynda.com, Bright, SlideShare and Careerify. These are some of the known companies that have managed their own brand apart from the linkedin. Lynda and Slideshare are popular among developers and casual users. Lynda being the oldest brand for tutorial based training company and Slideshare being the most known for it's popularity with slide content sharing.

I also did a bit background search on LinkedIn's open source contribution. There are some projects supported by them. So they do have some interests and demand from the developers as well. I think small things like this has helped with their valuation.

Valuation of the company is not limited to the revenue and the growth. Often the valuation part also includes the market capture for the specific niche. And for that reason LinkedIn has managed to get more presence on the market. Company such as this can influence brands and the people. So it has improved on it's valuation.

Recent changes in LinkedIn has also helped many companies hire from the offshore. And this sort of process can be really good for Microsoft's own internal human resource department. As per Satya Nadela's speech, it seems LinkedIn will be used to push some of the Microsoft's cloud products including Office suite.

Based on speculation from other companies, it seems Microsoft has purchased LinkedIn to capture market and to influence other brands. And LinkedIn is at the right place for them to do that. Microsoft being the perceptive company which has managed to get the most out of every brand.