News
Professional social network to become part of Microsoft’s productivity division; LinkedIn CEO Jeff Weiner to keep his job.
Microsoft on Monday agreed to acquire LinkedIn for US$26.2 billion (€23.3 billion), bringing a 433 million-strong audience of professional networkers to its productivity apps and services.
Funded primarily by new debt, the deal will see LinkedIn become part of Microsoft’s Productivity and Business Processes division, which includes its Office software for both consumer and enterprise clients, Skype, its OneDrive cloud storage service, and its Dynamics CRM solution.
"The LinkedIn team has grown a fantastic business centred on connecting the world’s professionals," said Microsoft CEO Satya Nadella, in a statement. "Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organisation on the planet."
Microsoft said LinkedIn will retain its "distinct brand, culture and independence." LinkedIn CEO Jeff Weiner will continue in his current role, reporting to Nadella.
"Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn’s network, now gives us a chance to also change the way the world works," Weiner said.
"I see incredible opportunity for our members and customers and look forward to supporting this new and combined business," added Reid Hoffman, LinkedIn’s co-founder, chairman, and controlling shareholder.
LinkedIn has 433 million members and 106 million monthly active users. 60% of LinkedIn use takes place on mobile phones. It lists more than 7 million active job opportunities.
In the first quarter of 2016, LinkedIn generated revenue of $861 million, up from $638 million a year earlier. Adjusted EBITDA increased to $222 million from $160 million.
Unlike ad-funded social networks, the bulk of LinkedIn’s revenue is generated by its Talent Solutions division, which offers tools that help recruiters track down appropriate candidates. In the first quarter, Talent Solutions generated revenue of $558 million.
LinkedIn members can also pay for premium accounts that unlock extra features to help them find a new job and make new contacts. Premium account revenue reached $149 million in Q1.
Microsoft said the boards of both companies have unanimously approved the deal. The transaction is expected to close later this year, subject to shareholder and regulatory approvals, and customary closing conditions.
