Microsoft Corp. (Nasdaq: MSFT) is buying LinkedIn Corp. for $196 a share, in a deal that is expected to close this calendar year. LinkedIn now boasts over 433 million members worldwide but has yet to convert its scale into profits.
Still, Microsoft describes LinkedIn as the world's "largest and most valuable professional network." In announcing the deal, Microsoft focused on LinkedIn's growth in membership, 19% year-on-year, and its growth in mobile usage, which is up to 60% of total usage now.
"The LinkedIn team has grown a fantastic business centered on connecting the world's professionals," Microsoft CEO Satya Nadella said in a statement. "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."
Microsoft says that it wants to keep the "distinct brand, culture and independence" of LinkedIn. Hence, CEO Jeff Weiner will stay on as CEO of the unit, reporting to Nadella.
You can see the two men talking about the acquisition below:
The boards of both companies have approved the deal. Microsoft says that it doesn't expect the buyout to be accretive to its bottom line for a couple of years.
The cash buyout, however, represents a significant premium for LinkedIn stockholders. The company's shares closed on Friday at $131.08. The shares have shot up to $192.82 in Monday morning trading.
— Dan Jones, Mobile Editor, Light Reading