Microsoft closes $US26b LinkedIn acquisition and (ugh) promises to extend sponsored content

LinkedIn

• 2015 revenue: $US2.99b (2014: $US2.2 billion)
• 2015 bottom line: $US164.8m loss (2014: $US15.7m loss)
• Users: 433 million (including 1m+ in New Zealand)

Microsoft

• 2015 revenue: $US93b (2014: $US86.8)
• 2015 bottom line: $12.1b profit after $US7.6 writedown for failed Nokia purchase (2014: $US22.0 billion)
• Cash: $US117 billion (the LinkedIn acquisition will be primarily debt-funded)

Nearly six months after it was first announced, Microsoft's $US26.2 billion acquisition of LinkedIn closed today, unscathed by regulatory review. 

At the time of the deal, NBR canvassed a couple of theories about why Microsoft would pay so much for the business network:

1. The ability to integrate LinkedIn profiles into products like Outlook and Dynamics CRM (Microsoft's rival to Salesforce). Microsoft duly confirmed that today, plus links to other products (see list end of article).

2. LinkedIn's algorithms, which are apparently pretty clever at crunching big data to find trends. 

Plus, a database of the CVs and business links of 470 million white collar workers around the planet is not a bad asset (LinkedIn had a unique New Zealand audience of 562,000 in November, according to Nielsen's MediaView survey, making it New Zealand's 32nd most popular site).

Today, a third reason emerged. LinkedIn said in a statement that, it will be "extending the reach of Sponsored Content across Microsoft properties."

Ugh.

Perhaps wary of his company's poor record with acquisitions (the company has blown around $US13 billion between Nokia and online ad company aQuantive), Microsoft CEO Satya Nadalla today reiterated that LinkedIn will retain a degree of independence and Jeff Weiner will remain its chief executive.

Mr Nadalla held up Facebook's purchase of Instagram as a model.

"I absolutely think of LinkedIn as our Instagram," he said.

Instagram has remained a separate service with its own identity since being bought by Facebook for $US1 billion in 2013.

Not all users have seen been so impressed. As an Instagram member, I've been annoyed at the way the photo-sharing service has lost its Twitter card integration and API support for third-party clients since it was taken over by Facebook.

I'm sure it's made solid commercial sense for Facebook. But for users, yuck.

LinkedIn/Microsoft integration
LinkedIn says its service will be integrated with Microsoft products in the following ways:

• LinkedIn identity and network in Microsoft Outlook and the Office suite;
• LinkedIn notifications within the Windows action centre;
• enabling members drafting résumés in Word to update their profiles, and discover and apply to jobs on LinkedIn;
• extending the reach of Sponsored Content across Microsoft properties;
• enterprise LinkedIn Lookup powered by Active Directory and Office 365;
• LinkedIn Learning available across the Office 365 and Windows ecosystem;
• developing a business news desk across our content ecosystem and MSN.com; and
• redefining social selling through the combination of Sales Navigator and Dynamics 365.