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  • Microsoft Has Purchased LinkedIn for Billions. Cash.
Technology Articles > Software > Business > Microsoft Has Purchased LinkedIn for Billions. Cash.

Microsoft has purchased LinkedIn for a cool $26.2 billion. The all-cash transaction happened this morning and sent LinkedIn stock through the roof. The stock is now valued at $196 per share. This is a somewhat surprising move for Microsoft.

On the one hand, it makes sense given that Microsoft is a business-centered company. On the other hand, some are wondering whether or not LinkedIn is overvalued.

Worth Billions?

Microsoft seems to think that LinkedIn is worth billions. In cash, no less. That’s not quite the consensus across the web though. LinkedIn on a user level is a useful networking tool and can lead to some jobs and connections, but it’s not really one of the most important social networks - or lucrative ones. Then again, in this deal Microsoft has gained access to the 433 million professionals that use LinkedIn.

Many of those millions of professionals also pay for a subscription in some manner to use the service. Microsoft has really gained insight into its business clientele by purchasing LinkedIn, which might be why the company saw the social network as worth those billions - it’s a numbers game when you think about it.

The Purpose

The Internet is buzzing today about the recent deal. For LinkedIn's users that are getting tired of the site, the deal comes as something that may carry some hope with it. There’s currently a campaign on LinkedIn to bring the network back to what it was - business networking - and less of what it has become - a kind of Facebook clone.

LinkedIn does keep generating users in many ways, and those users do purchase ads on the site. This is mostly how LinkedIn has been making money.

Microsoft hasn’t said much about the deal. The company has stated that ‘...we are in pursuit of a common mission centered on empowering people and organizations,’ but has not elaborated on the purchase in any other way. Interestingly, Twitter stock has also gone up this morning as investors assume that Twitter will be the next Microsoft purchase.

All In Line

Even though Microsoft has purchased LinkedIn, the company will stay intact. So nothing is going to change on the side of LinkedIn users, for now. Whether or not Microsoft will want to change things as they are remains to be seen, but this has all really been just a way for Microsoft to gain access to the LinkedIn database.

All of this was a good move for Microsoft. The company does thrive on numbers and those numbers are even better if they provide the company with insight into the business community. It’s hard to determine whether or not Microsoft will purchase Twitter, but it doesn’t make as much sense from a business standpoint. Where business people communicate and collect on LinkedIn, the same people don’t usually use Twitter - or not as much.

Microsoft is in the business of buying information and gaining insight, and that’s what this purchase is mostly about. Whether or not LinkedIn will change remains to be seen.