- Microsoft announced on Monday it has reached a deal to purchase LinkedIn for $26.2 billion.
- LinkedIn is expected to "retain its distinct brand, culture and independence," according to the announcement.
- The all-cash deal is expected to close later this year.
For Microsoft, the deal is an example of the company working to diversify its platform and boost market penetration. In the announcement, Microsoft CEO Satya Nadella highlighted the potential growth for LinkedIn and Microsoft Office 365. Microsoft's productivity suite is already the most popular web-based business application. Combined with the LinkedIn's vast professional network, Microsoft will have a major stake in most professionals' working lives.
LinkedIn also touted the future combination with Microsoft's cloud. "Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn’s network, now gives us a chance to also change the way the world works," said LinkedIn CEO Jeff Weiner.
Beyond being a professional network, LinkedIn also has a large recruiting stake. Earlier this year, LinkedIn launched its "ProFinder" service, which allows customers to find qualified professionals to help them with a specific type of product or service, according to the Business Journals. In its most recent quarterly earnings report, LinkedIn highlighted its expanded membership base and increased engagement. LinkedIn was not profitable, but the platform was generating more cash, according to The Motley Fool.
Weiner will remain in his position and report directly to Nadella, according to the announcement. Once the deal is closed, LinkedIn's financial reporting will fall under Microsoft's Productivity and Business segment.
Following the announcement, the professional network's shares were up 63% in pre-market trading, according to Reuters.