The Merger

Today Microsoft has announced they are purchasing the social network for professionals, LinkedIn, for a cool $26.2 billion.

Both the boards of Microsoft and LinkedIn have approved the purchase, which equates to $196 per share. If for some reason the sale falls through, LinkedIn will owe Microsoft a $72 million termination fee.

How LinkedIn Benefits:

The company keeps their branding, but uses Microsoft’s company strategy to create and offer more services for the enterprise sector. Now they will be able to compete beyond the software level, a previously large disadvantage for LinkedIn.

How Microsoft Benefits:

Microsoft will use LinkedIn’s social graph tool as a sales funnel for their products. It additionally will complement products Microsoft already offers for both collaboration and communication. Since LinkedIn’s launch in 2002 the company has acquired over 433 million users in over 200 countries. Of those users 105 million are active users. This is a great new audience and platform for Microsoft to use in order to gain more consumer’s and create new collaborations.

This acquisition comes at a good time for the LinkedIn team who’s stock had dropped from a high of $258 per share. Despite drops in share value, LinkedIn brings in roughly $2 billion a year alone in recruitment revenue and is one of the largest purveyor’s of new job postings. The great work the company has done with their SEO has lead to an astonishing high of 45 billion quarterly page views.

Despite a decreased value in shares, LinkedIn should still be considered a resounding success of a tech company and a great acquisition for Microsoft.

Read LinkedIn CEO Jeff Weiner’s Letter to Employees

Read Microsoft CEO Satya Nadella’s Letter to Employees