On Monday June 13th, Microsoft Corp. and LinkedIn Corporation announced that Microsoft will acquire LinkedIn for $196 per share in an all cash value of $26.2 billion.

 On Monday June 13th, Microsoft Corp. and LinkedIn Corporation announced that Microsoft will acquire LinkedIn for $196 per share in an all cash value of $26.2 billion. LinkedIn is a social media site geared at connecting professionals with one another in order to build a professional network while leveraging the power of social media communication. LinkedIn will remain independent and retain its current CEO, Jeff Weiner, who will now report to Microsoft’s CEO, Satya Nadella. The two companies have agreed on a shared sense of alignment. “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,” says Weiner.

Productivity tools and communication tools are what empower people to be great at their jobs, says Nadella. His inspiration for acquiring LinkedIn was connecting Microsoft’s tools with a professional network to enhance worker’s professional lives. Microsoft’s vision is to empower people to excel in their current jobs and also be able to find the next greater and bigger job.

This deal raises skepticism since this will be the largest deal Microsoft has ever done, and its previous acquisitions have been lackluster successes. Earlier deals for Skype Technologies and Yammer Inc., designed to bolster Microsoft’s digital and social credentials, did little of either. This acquisition, however, is backed by many people including all the board of directors, both CEO’s, and even previous MS CEO Bill Gates. I believe there are a few reasons why this new deal makes good sense and why it will succeed. The first is the synergy between the companies and their products. Microsoft’s professional cloud services jive perfectly with LinkedIn’s professional online network since LinkedIn users are arguably Microsoft’s core demographic. Second Microsoft hopes to leverage LinkedIn’s “Sales Navigator” to enhance their customer relationship management (CRM) tool. Since CRM is about managing relationships, MS can now leverage the existing social network and data within LinkedIn. Finally, MS is maintaining LinkedIn’s independence and giving the division full autonomy which will help smooth the transition instead of forcing one organization into another.

So what’s next on the acquisition list? Will twitter be acquired by a big tech giant like Microsoft? How about Pinterest? Only time will tell.

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