Microsoft’s agreement to buy LinkedIn may help the software developer boost its HR technology presence while making the social network even more valuable to recruiters and other HR professionals, according to benefit professionals.
Microsoft, on Monday, announced the $26.2 billion planned purchase, which would be one of the largest-ever technology-industry deals. The software giant, in announcing the move, outlined a vision in which a person’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.
One possible integration of LinkedIn and Microsoft is applicant tracking, says Ben Yomtoob, a consultant at HR and benefits consultancy Gruppo Marcucci.
And, since Microsoft already owns Skype, he says, Microsoft might be able to better integrate it and promote it 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,” he says, adding “[the acquisition] would make HR … think differently about Microsoft and what it does.
“It gives them credibility,” Dinkin says.
Microsoft, through its PR firm, declined to comment on its plans.
Let’s make a deal
Microsoft 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," Microsoft CEO Satya Nadella says. “This is the logical next step to take. We believe we can accelerate that by making LinkedIn the social fabric for all of Office.”
LinkedIn has long been valued for having the potential viral growth of a social network with the recurring revenues of a software-as-a-service business. But recently, growth has started to slow and it’s been more difficult to get people to return to the site and pay for services. The company has been rethinking its strategy, redesigning its suite of mobile applications to make the product easier to use. Combining with Microsoft would give LinkedIn a boost in members with reasons to visit, making it more useful if people are sharing updates more frequently.
Microsoft started talking with LinkedIn about a possible deal in January, Nadella says. That’s right before LinkedIn gave a lower-than-expected revenue forecast that caused its stock to fall more than 40% in a day. The talks got serious once Nadella mentioned his vision for the structure, telling Weiner that LinkedIn could continue to operate independently, like Facebook’s WhatsApp or Google’s YouTube, Weiner says.
“In that very first meeting, we both got excited as we were brainstorming and riffing a bit about the things we could do in combination, combining the world’s professional network and the world’s professional cloud,” Weiner said in a statement.
Bloomberg News contributed to this report.
