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Microsoft Is Spending $26 Billion to Put LinkedIn In Your Office Software

The biggest maker of software in the world is spending more money than it ever has on an acquisition, to put its hands on LinkedIn's more than 400 million users.
Microsoft ceo Satya Nadella (left) and his LinkedIn counterpart Jeff Weiner in a screen grab from the video announcing their combination

Microsoft and LinkedIn are teaming up in an $26 billion deal. The end result of the hookup, the biggest deal ever made by Microsoft, is that users of its business software will see news and suggestions from LinkedIn — and that will create opportunities to sell ads and subscriptions.

Microsoft, the largest maker of software in the world, is buyingLinkedIn, the social network aimed at professionals,for $26.2 billion in all-cash transaction. The two companies announced the deal Monday morning before the market open on Wall Street.


Seattle-based Microsoft is paying $196 per share of LinkedIn, a premium of 49.5 percent over the closing price of LinkedIn shares on Friday. Investors reacted by buying up LinkedIn stock, with the share price up to $194 before the start of trading Monday. At the same time, Microsoft shares were down 3 percent.

Microsoft says it's buying LinkedIn, which has more than 430 million users, to combine its cloud-based services with LinkedIn's huge user network.

"I have always had a great admiration for LinkedIn," Microsoft ceo Satya Nadella said in a video on Microsoft's website. "I have been thinking about this for a long time."

In an email sent Monday morning to Microsoft's 118,000 employees, Nadella explained further what he and LinkedIn ceo Jeff Weiner are after with the acquisition.

The combination is meant to create "new experiences," such as "a LinkedIn newsfeed that serves up articles based on the project you are working on and Office suggesting an expert to connect with via LinkedIn to help with a task you're trying to complete."

The idea is that this won't just help people work better, but it will make Microsoft money as well.

"As these experiences get more intelligent and delightful, the LinkedIn and Office 365 engagement will grow," Nadella wrote in his email. "And in turn, new opportunities will be created for monetization through individual and organization subscriptions and targeted advertising."

According to data cited by VentureBeat, however, only about 25 percent of LinkedIn's more than 400 million users are active every month

After the deal, LinkedIn will become part of Microsoft's productivity and business processes unit. Weiner will remain chief executive of LinkedIn, reporting to Nadella. The deal is expected to close in 2016, the companies said in a joint statement.