When it comes to the internet, there are probably nothing larger than Google. And if considering social media networks, Facebook is already taking a huge market where its influence in the business is almost unparalleled.
But when it comes to creating software to get things done, Microsoft is still the de facto standard. And for works, its Office products are still the most prominent.
To nudge its way between the competitors on the internet and social media, the Windows-maker tech giant is spending $26.2 billion in an all-cash deal to buy LinkedIn, the popular social media for business and professionals alike.
LinkedIn acquisition by Microsoft is by far, Satya Nadela's largest. His aim? To make LinkedIn the "key to our bold ambition to reinvent productivity and business processes."
While the news should be a good one for both sides, the Wall Street isn't convinced. In 2015, LinkedIn share valued had climbed as high as $269. But since then, the price declined rapidly as investors were skeptical about its market and its business.
And just before the Microsoft announcement, LinkedIn was trading at $131. The news about Microsoft acquiring LinkedIn made its share climbed to $196 - the price Microsoft's willing to pay.
Being The Center Of The Business World
Microsoft is a giant and still undisputed when it comes to its prominent position in the operating system business with Windows as well as work apps with its Office products. Catching up fast, is its cloud-based offerings.
But the biggest advantage Microsoft is having if compared to Google, Apple, Facebook, Amazon and some others that have their own similar products, is its influence. Microsoft has put its teeth too deep for people to forget what it has achieved in its glorious days, and Microsoft is still the name that get things done for many corporate and business entities.
With that in mind, the company has been hunting for large acquisition in the enterprise cloud space for more than a year. In April 2015, Microsoft and Salesforce were in serious talks about acquisition. Microsoft bid for $5 billion while Salesforce sticks to its price that was closer to $70 billion, a price that was too expensive even for Microsoft.
Now the choice lands on LinkedIn. But acquiring it, Microsoft wants to put a higher emphasis on the web by owning the hub where professionals and businesses gather in the social digital sphere.
For the bigger picture about the deal. Microsoft wants to be at the center of the business world, both online and offline.
Microsoft's acquisition to provide ways for that attempt isn't at all the first. Previously, Microsoft has hoped that its SharePoint could be the social hub for business, but the market tended to shift and Microsoft missed its chance. Then came the time when Microsoft bought Yammer, but again that acquisition is not doing much benefits. It also had interest on Slack before backing off.
Now with LinkedIn, Microsoft is certain that it sees a great chance upon it.
As for the benefits, the acquisition is basically the company's way to chart the world of business and their shared data. At a glance, this will give the company a good layer of data to build itself any business-focused cloud products that can range from email to CRM (Customer Relationship Management). Furthermore, the company could also add parts of LinkedIn into its growing Office 365 subscription business while keeping the premium service as a standalone option.
LinkedIn data that also include workers and many employees could also play well with Dynamics, part of Microsoft business that competes against Salesforce. Microsoft pitches the knowledge that LinkedIn complements what its services know about businesses through corporate data.
And up to the very least, Lynda that was LinkedIn's largest acquisition should also benefit Microsoft.
With the ability to make professionals more productive, Microsoft is also counting on LinkedIn to help it with the consolidation of business users' profile data across apps and services; the development of a consolidated professional newsfeed with information on users' contact network, industry and profession; and the surfacing of more potential Cortana integration points.
And as for LinkedIn, the acquisition is certainly a good news. In the recent months, the company has gone from one of the most valuable internet companies to a potential takeover by larger corporation after it badly missed estimates about its quarterly earnings in February 2016. At that time, its shares fell 43 percent and its market valuation fell by more than $14 billion.
Being acquired by Microsoft, LinkedIn CEO Jeff Weiner and his employees are joining Microsoft's team. The deal is expected to be complete by the end of 2016.