MICROSOFT TO ACQUIRE LINKEDIN

Microsoft has announced that they will pay $26.2

billion for Linkedin purchase and this will be third largest

tech acquisition in the history

THE DEAL HAS BEEN SET FOR $26.2 BILLION

LinkedIn is the largest professional social network by far, with around 430million registered users and 100 million visitors to its site each month

ABOUT LINKEDIN

•Revenue growth has been slower than expected, and rolling out new businesses and improving existing ones has proved pricey• Some analysts have questioned how much bigger it can become

CHALLENGES TO BE FACED BY MICROSOFT

• In February 2016, LinkedIn’s share price sank by more than 40% in a day and shedding $11 billion from its market value

• The firm reported that forecasts of revenues for 2016 were lower than expected

• LinkedIn had also revealed that it made a net loss of around $165m in 2015

MAIN CONCERN FOR MICROSOFT

• The social-network firm has an enviable team of data scientists, a commodity coveted by tech firms

• These design algorithms to find patterns in big piles of digital information

• LinkedIn will be useful to Microsoft for other reasons too

REASONS BEHIND ACQUISITION

• The firm gathers detailed information about its users, including their employment history, education and whom they know

• These data could prove valuable to Microsoft as it attempts to build offerings for managing relationships with customers and to compete with Salesforce

REASONS BEHIND ACQUISITION

• Salesforce’s current market value is around $55 billion

• LinkedIn is a cheaper substitute. It will also dovetail with Microsoft’s existing products in Office, its collection of business applications and services that includes Word, Excel and Outlook, an e-mail system

POINTS THAT WILL FAVOR MICROSOFT

• The latter might gain in popularity if LinkedIn keeps users’ details up to date and offers alerts if a contact moves firms

• Such extra features should, in theory, encourage companies to buy new cloud services from Microsoft

POINTS THAT WILL FAVOR MICROSOFT

• Past history of Microsoft has not been good for Microsoft

• Skype in 2011 for $8.5 billion was not successful

• Microsoft squandered over $6.3 billion on aQuantive and $7.6 billion on Nokia’s handset business in 2014

PAST HISTORY OF TECH ACQUISITION

• The deal has been welcomed • It could signal an impending tech buying spree • In the days after LinkedIn’s purchase, investors

looked around to see which other firms Mr Nadella and his peers might have their eyes on

• But not every tech firm is lucky enough to have Mr Nadella coveting it

CONCLUSION

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