The social network of professionals switches to Microsoft. In a quick deal, the Redmond-based IT giant bought control of Linkedin for $196 per share, valuing the company at a record high 26,2 billion dollars. A note from the two companies explains that LinkedIn "will maintain its distinctive brand, culture and independence" and CEO Jeff Weiner will remain in his post, but will report directly to Satya Nadella, number one at Microsoft. Reid Hoffman, president, co-founder and controlling shareholder of Linkedin, and Weiner himself "fully support the transaction", which is expected to close during the calendar year. LinkedIn, which opened today on the Nasdaq at $130 a share, immediately shot up to $194 in the first hours of trading, gaining 46%. Microsoft instead yields 4%.
Microsoft's goal is to relaunch the social network that has disappointed investors and markets in recent months due to competition and a recovering job market that also caters to more traditional channels. LinkedIn – despite its 400 million users – showed i first signs of weakness: the last quarter of 2015 closed with a loss of 8,4 million dollars (2,9 million profits in the same period last year). The extraordinary items had weighed because revenues had risen by 34% to 862 million dollars, beyond estimates for 857 million, and in the whole of 2015 to 2,991 billion. 2016, however, started better: in the first three months overall revenue increased by 35% to 861 million dollars.
“The LinkedIn team – says Nadella – has grown a fantastic business focused on connecting the professional world. Together – she adds – we can accelerate the growth of LinkedIn and of Microsoft Office 365 and Dynamics”. Microsoft will finance the acquisition primarily through new debt issuance. Microsoft expects LinkedIn to have a minimal impact of about 1 percent on adjusted profit for fiscal 2017 and 2018, so it should start making a positive impact in fiscal 2019.
LinkedIn is in fact the largest acquisition made so far by Microsoft, and the third in terms of acquisitions made by (and towards) tech companies, after Dell which bought EMC (67 billion) and HP which bought Compaq in 2001 for 33,6 .9 billion. Microsoft's record so far was the 2011 billion invested in XNUMX to take over Skype, and in the absolute top ten of the tech sector it also surpasses one of the most famous acquisitions of recent years: Facebook that got its hands on Whatsapp for 19 billion.
