Nadella and LinkedIn CEO Weiner said they had been brainstorming a collaboration for some time. LinkedIn CEO Jeff Weiner will keep the title and report to Microsoft Nadella. The companies said their respective boards had unanimously approved the deal. Devitt had a Buy rating with a target price of $180 for LinkedIn in his most recent note to investors. "LinkedIn is a highly strategic suite of enterprise productivity tools and perhaps the go-to destination for B2B marketing on the Internet," said Scott Devitt, internet equity research director for investment banking firm Stifel. Three months ago, LinkedIn launched 50 online learning paths to help job seekers improve their skills. LinkedIn has sought to evolve itself, last year acquiring online learning site last year for $1.5 billion. "In addition, LinkedIn can leverage Microsoft's cloud infrastructure and engineering talent to become more aggressive in all three areas that it operates." "We believe that LinkedIn can leverage Microsoft's scale across all three solutions," Doshi said.
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Microsoft's alone has 400 million active users and Microsoft Office has been downloaded 340 million times on Android and iOS devices, according to Microsoft. "Just as important, 60% of LinkedIn users are on mobile, and this should accelerate Microsoft's consumer 'Net mobile presence."Īs for LinkedIn - besides the hefty payout - it stands to expand its recruiting, advertising and sales programs though Microsoft's extensive business and consumer connections. "Microsoft has fallen behind in the consumer Internet sector, and this deal gives Microsoft 433 million social LinkedIn members that is growing," Doshi said. The deal not only helps Microsoft in the office, but also on social media, he says.
We've always considered two potential acquirers for LinkedIn - Salesforce or Microsoft," he said in a note to investors Monday.
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While Microsoft is paying a premium for LinkedIn, the software giant should gain from the acquisition, says Mizuho Securities analyst Neil Doshi.
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Since then, LinkedIn has increased that forecast to a range of $3.65 billion to $3.7 billion, nearing the $3.73 billion expected by analysts polled by S&P Global Market Intelligence.Īnother recent hindrance for LinkedIn: the social networking company contacted as many as 100 million members suggesting they update their passwords when a database of LinkedIn emails and passwords from a 2012 breach were spotted for sale online by hackers. The Mountain View, Calif.-based company lost about $10 billion in market cap after issuing a lower-than-expected revenue forecast for its fiscal 2016. (He had seen it swoon in February when LinkedIn shares plummeted 44% to $108.38 on Feb. LinkedIn founder and chairman Reid Hoffman, who holds nearly 14.5 million shares in the company, saw his stake increase by about $1.1 billion to $2.8 billion. Several LinkedIn shareholders netted a healthy windfall Monday on the soaring stock price. LinkedIn shares ( LNKD) closed Monday up 47% to $192.26. Microsoft shares ( MSFT) were down 2.6% to $50.14.
The acquisition of LinkedIn would be Microsoft's largest ever the deal values LinkedIn at $196 per share, representing a 49.5% premium over Friday's closing price. "LinkedIn, with its profiles, groups and connections, is ideal." In the enterprise market, Microsoft wants to create a new platform for work that makes it easier for employees to collaborate and get things done," he said. Microsoft likely sees the potential of connecting its Office Graph intelligent workplace collaborative platform with LinkedIn's network, says TJ Kiett, a senior analyst with research firm Forrester.
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