Microsoft to pay $26.2 billion for LinkedIn’s contacts

Microsoft agreed to pay $26.2 billion in cash for LinkedIn, the Redmond, Wash. software giant’s largest acquisition to date.

The deal brings together an established tech powerhouse that made its name on desktop PCs and a Web upstart that grew out of the ashes of the first dotcom boom.

[...] over time, the companies will build ties between LinkedIn’s database of users and Microsoft’s software that make it an even more powerful challenger to the likes of Google, Salesforce, and Oracle.

In announcing the transaction, which is expected to close by the end of the year pending regulatory approvals, LinkedIn CEO Jeff Weiner and Microsoft CEO Satya Nadella both talked up the company’s commitment to boosting professionals’ productivity.

For businesses that run on Microsoft’s Exchange email and Office apps, Microsoft is the arbiter of professional identity.

Many of LinkedIn’s 433 million users — “members,” as Linkedin prefers to call them — keep their online resumes updated, forming a portable calling card they take from one workplace to the next.

Yet those links have real value to many, as an online address book that they can bring to their next employer as salespeople, recruiters or dealmakers.

Both LinkedIn and Microsoft executives call those sets of connections “graphs,” a technical term meaning the links between nodes in a network.

[...] Microsoft, which has under Nadella put much more emphasis on developing mobile versions of its software for rival operating systems, including Google’s Android and Apple’s iOS, could help bolster LinkedIn’s ranks of programmers and designers.

On the investor call, Nadella said Microsoft’s experience in artificial intelligence could be applied to optimizing the feed of news articles and updates that appear on LinkedIn’s homepage.

While LinkedIn has grown internationally and broadened its appeal to college students and recent graduates, it has struggled with highly desirable technical employees, many of whom have soured on it because of constant appeals by recruiters.

Engineers, he suggested, are more likely to send a potential employer links to their page on GitHub, a site for sharing software code, than LinkedIn.

On Monday’s investor call, Brad Smith, Microsoft’s president and chief legal officer, expressed confidence that the acquisition would pass antitrust scrutiny as a “highly complementary” deal.