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Why is Microsoft acquiring LinkedIn?

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The news which making quite a buzz in the business arena is that Microsoft is acquiring LinkedIn (business-oriented social networking service). LinkedIn works on the concept of providing jobs to the suitable professionals & help companies to find workers.

Microsoft will pay $26.2 billion or $196 per share for LinkedIn.

This deal has been approved by the both boards but still has to go through the regulatory procedure. LinkedIn has over 443 million users worldwide plus mobile friendly members, & has seen 20% growth year on year as it has become an effective tool for recruiting, finding new clients, sharing posts for a large audience, discussing project through messaging & group discussion. LinkedIn is keeping its branding & product & LinkedIn’s CEO Jeff Weiner will report to Satya Nadella. LinkedIn is not a mainstream social network like Facebook, Twitter, Instagram but it has the audience which is lucrative. Companies spend a large amount of money in hiring best employees, & LinkedIn provides effectively world largest cataloged of skilled professionals. LinkedIn earns his two-thirds of revenue from charging businesses to post job ads & provides other recruiting services. LinkedIn also earns money by charging on user subscription to LinkedIn users.

In 2014, Microsoft closed a deal with Yammer for $1.2 billion. Yammer is exactly same as LinkedIn except one difference for Yammer you use a corporate email account to sign up but in the case of LinkedIn, you can use any email account.

Mr. Nadella said in his letter to staff that we are in pursuit of a common mission centered on empowering people & organizations. This deal is the key to unlocking the door of bold ambition to reinvent productivity & business processes. In past Microsoft is only related to PC software making but this deal will establish a new image as a company that sells business technology services.

Access to LinkedIn profile data, which includes every signal detail about people’s career histories, educational background into Microsoft hands which will be likely to use by the sales departments & recruiters to help them to find new ones & enhance their relationship with customers. Microsoft also wants to integrate data with Cortana, the personal assistant that is just like Siri & Google now. In an advance version of Cortana, it may be enabled to a function like look up the phone number of a LinkedIn contact or tell you about the mutual friend.

This will help Microsoft to regain customers which are fallen behind in internet sector.


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