Microsoft Plans to Buy LinkedIn to Boost its HR Technology Presence

June 16, 20168:01 am691 views

Beginning of this week, Microsoft announced one of its largest ever technology-industry deals of making a $26.2 billion planned purchase to acquire LinkedIn, and boost its HR technology presence in the industry. This move would make the professional social network even more valuable to recruiters and other HR professionals.

The software-tech giant has outlined a vision in which an individual’s LinkedIn profile resides at the middle of other pieces of their work life, connecting with Windows, Outlook, Skype, Office productivity tools such as Excel and PowerPoint, and other Microsoft products, Benefit News reports.

Possible integration of Microsoft with LinkedIn is the ATS (Applicant Tracking System), and since Microsoft already owns Skype, they may be better able to integrate it and promote as an online interviewing tool.

Indeed, the deal will help Microsoft climb up the HR value chain and help LinkedIn solidify its HR position, says Elliot Dinkin, president and CEO of benefits consultancy Cowden Associates, a UBA member firm.

“LinkedIn by itself is certainly a great resource of information for recruiting, retention and gathering valuable information,” Dinkin added. “[The acquisition] would make HR … think differently about Microsoft and what it does. It gives them credibility.”

While Microsoft’s PR firm declined to comment on the company’s plans, the tech-giant is paying $196 per share in the transaction, a 50% premium to LinkedIn’s Friday closing price. LinkedIn will retain its brand, culture and independence and Jeff Weiner will remain CEO of the social network, Microsoft said in a statement.

According to Microsoft’s website, LinkedIn has more than 433 million members nationwide, a 19% year-over-year growth and 105 million unique visiting members per month, a 9% year-over-year growth.

“This is about the coming together of the leading professional cloud and the leading professional network,” says Microsoft CEO Satya Nadella. “This is the logical next step to take. We believe we can accelerate that by making LinkedIn the social fabric for all of Office.”

Jeff Weiner will remain CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft. Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner both fully support this transaction. The transaction is expected to close this calendar year.

See: Microsoft Explores the New World of Work Trends in Asia Pacific

Over the past year, LinkedIn has launched a new version of its mobile app that has led to increased member engagement; enhanced the LinkedIn newsfeed to deliver better business insights; acquired a leading online learning platform called Lynda.com to enter a new market; and rolled out a new version of its Recruiter product to its enterprise customers.

These innovations have resulted in increased membership, engagement and financial results, specifically:

  • 19 percent growth year over year (YOY) to more than 433 million members worldwide
  • 9 percent growth YOY to more than 105 million unique visiting members per month
  • 49 percent growth YOY to 60 percent mobile usage
  • 34 percent growth YOY to more than 45 billion quarterly member page views
  • 101 percent growth YOY to more than 7 million active job listings

“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said. “Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet.”

“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. “For the last 13 years, we’ve been uniquely positioned to connect professionals to make them more productive and successful, and I’m looking forward to leading our team through the next chapter of our story.”

The transaction has been unanimously approved by the Boards of Directors of both LinkedIn and Microsoft. The deal is expected to close this calendar year and is subject to approval by LinkedIn’s shareholders, the satisfaction of certain regulatory approvals and other customary closing conditions.

Also read: How Do You Ensure Reliability of Recommendations and Endorsements on LinkedIn?

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