MOUNTAIN VIEW, CA: The announcement that software giant Microsoft is to acquire LinkedIn, the professional social networking platform, for $26.2bn, marks a potentially defining moment for both companies while offering new opportunities for B2B advertisers.
"Today is a re-founding moment for LinkedIn. I see incredible opportunity for our members and customers," said Reid Hoffman, co-founder and controlling shareholder of LinkedIn, which has seen its share price fall by 40% over the past year.
The acquisition, the biggest ever by Microsoft, marks the latest in a series of moves by chief executive Satya Nadella aimed at reinventing the company, the Financial Times reported.
"The LinkedIn team has grown a fantastic business centered on connecting the world's professionals," said Nadella. "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."
Combining Microsoft and LinkedIn services could make workers more productive by, for example, revealing connections and data that might otherwise take additional steps to find, the Wall Street Journal noted.
"It's really the coming together of the professional cloud and the professional network," Nadella observed.
The acquisition gives Microsoft a foothold in social and mobile and positions it as a leader in data on the professional world, Marketing Land reported.
It can now offer advertisers, particularly B2B advertisers, more refined targeting and more reach. And there are commercial opportunities via Microsoft's Cortana, "the professional's" digital assistant.
Microsoft also envisages an Intelligent Newsfeed that will enable people to stay connected with what's happening in their network, industry and profession.
Microsoft added that LinkedIn will "retain its distinct brand, culture and independence".
And that, according to LinkedIn chief executive Jeff Weiner, was crucially important to sealing the deal. "His [Nadella's] vision was to operate LinkedIn as a fully independent entity within Microsoft, a model used with great success by companies like YouTube, Instagram and WhatsApp," he told staff.
Data sourced from Microsoft, LinkedIn, Financial Tines, Wall Street Journal, Marketing Land; additional content by Warc staff