3 Reasons why Microsoft acquired LinkedIn

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microsoft-linkedin

 

Almost 10 days have passed since the IT giant announced its acquisition of LinkedIn. Microsoft will acquire LinkedIn for $196 per share in an all-cash transaction valued at $26.2 billion, inclusive of LinkedIn’s net cash. Some are saying that Microsoft paid too much for this deal. However, it is the opinion of Techrux team that it was the affordable deal from the perspective of Microsoft.

 

  1. Buying the database is a trend of business

Almost 2 years ago, Facebook acquired WhatsApp with the price of $22Billion. At that time WhatsApp had 1 Billion users for the service. Facebook paid $22 per user. Contrast to WhatsApp purchase by Facebook, Microsoft paid $61 per user. It seems that Microsoft paid too much on this. However one thing to remember is that LinkedIn has the users’ modified and professional data. Even the year to year growth was 19%.

 

As mobile messenger service has similar products like LINE, Facebook Messenger, and Kakao, LinkedIn has the dominant number one position in this business. We should think about this.

 

  1. Checking the trends of business market by Job posting

Microsoft mentioned that 101 percent growth YOY to more than 7 million active job listings. Of course, the job listings shall not be 14 million on the year of 2017. But one thing we can guess is that by analyzing the trend of job listing, Microsoft can get the insights on the each industry, whether the industry is booming or not.

 

As Microsoft is becoming a Software company to as-a-service provider, the ability to provide service upon exact demand shall be the prioritized factor for the service.

 

  1. Synergy between both companies

Microsoft has been looking for ways to get more people using cloud apps like Office 365, Skype and Cortana.

 

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. LinkedIn’s newsfeed could draw on, say, your Calendar schedule to become more engaging, which could in turn boost its ad revenue. Cortana could scour your LinkedIn network to create a quick brief about who’s attending your next meeting.

 

The M&A by Microsoft have changed the wave of Tech acquisition. Twitter, for example, has risen its stock price from $14 per share on June 13th to $16 today.

 

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