Now Microsoft bets on social networking with LinkedIn buy: All you need to know about the deal

US-based multinational technology giant Microsoft Corporation on Monday announced its biggest-ever acquisition deal and said it will buy LinkedIn Corp for a whopping $26.2 billion. The offer price is fixed at $196 per share, representing a premium of 49.5 percent to LinkedIn’s Friday closing price. Here’s the list of all you need to know about the Microsoft-LinkedIn deal. [caption id=“attachment_618042” align=“alignleft” width=“380”]  Reuters[/caption] What is the deal all about? In order to make the software company a major force in next-generation computing, the current Microsoft CEO Satya Nadella emphasised that the acquisition will connect the widely used software like Microsoft Word and PowerPoint with LinkedIn’s network of 433 million professionals. The combination could enable Microsoft to add a suite of sales, marketing and recruiting services to its core business products and potentially challenge cloud software rivals such as Salesforce.com Inc, Reuters report said. For Microsoft, LinkedIn will provide it with immediate access to more than 433 million members and a solid social graph which was missing earlier. Earlier, the Redmond, Washington headquartered company had to rely on Facebook, LinkedIn, and others to provide that key connection. According to Nadella, LinkedIn will be the central professional profile that will be surfaced in apps like Outlook, Skype, Office, and even Windows itself. How did the shares react for both the companies? While Microsoft’s shares closed down 2.7 percent to $50.14, LinkedIn’s shares jumped 48 percent to $194.28 before the opening bell on Monday before ending 46.64 percent higher at $192.21. What prompted Microsoft to go for this acquisition now? The LinkedIn acquisition could help Microsoft play to its strengths in analytics, machine learning and artificial intelligence, Nadella said on the investor call. For Microsoft, the LinkedIn deal is also a chance to reverse a terrible track record with acquisitions, including paying $9.4 billion for phone maker Nokia in 2014, $1.2 billion for business network Yammer in 2012, $8.5 billion for video-calling tool Skype in 2011, and $6.3 billion for ad business aQuantive in 2007. In 2012, it wrote down its aQuantive acquisition by $6.2 billion, and its cumulative writedowns for Nokia total $8.55 billion, the Reuters report said. What experts have to say about the deal? Even as the deal is yet to fructify, analysts are already divided about whether the deal is good for Microsoft. According to a ToI report, Benedict Evans, a member of the Andreessen Horowitz venture capital firm who blogs about technology, said it seems to be looking toward the future. “Very clever and oblique MSFT thinking – how will we communicate, share & connect in a decade? Not docs + email. Social graph is key,” he said in a tweet, referring to the company’s Wall Street trading symbol. Jack Gold of J. Gold Associates said LinkedIn “is highly complementary” to Microsoft services such as Skype for Business and Yammer. However, Roger Kay, analyst and consultant with Endpoint Technologies Associates, said it is doubtful Microsoft can use the deal to compete in a world of social networking dominated by Facebook. “It doesn’t help at all competing with Facebook,” he said. “LinkedIn is not in the same league as Facebook.” Microsoft, paying a premium of some 50 percent for LinkedIn, will probably end up writing down much of the investment. Trip Chowdhry of Global Equities Research said Microsoft has not learned from a string of failed acquisitions. Microsoft “was late to mobile” with its purchase of Nokia’s phone division and “failed miserably on it,” he said, adding that Skype usage “has gone in only one direction, and that is down.” After LinkedIn, will Twitter be next? After Monday’s deal, investors have raised hopes that another social media company, Twitter Inc, could be the next acquisition target, helping the company’s shares gain almost 4 percent. With agency inputs