MICROSOFT PAID $26 BILLION FOR LINKEDIN THEN LEFT JEFF WEINER RUNNING IT
Microsoft didn't buy LinkedIn to erase it. It paid $26.2 billion and deliberately kept the man running the company in charge.
On June 13, 2016, Microsoft announced one of the biggest acquisitions in its history:
LinkedIn for $26.2 billion.
The price was:
$196 per share
and the transaction was entirely in cash.
But the most interesting part wasn't the price.
It was what Microsoft said would happen afterward.
LinkedIn would keep its brand.
LinkedIn would keep its culture.
LinkedIn would remain independent.
And most importantly:
Jeff Weiner would remain CEO.
He would report directly to Microsoft's CEO, Satya Nadella.
MICROSOFT WASN'T BUYING JUST A SOCIAL NETWORK
In 2016, LinkedIn had more than:
433 million members
and more than:
105 million unique visiting members per month.
Mobile usage had also risen sharply, reaching about 60% of usage.
But LinkedIn was much more than a place to post your CV.
It had built businesses around:
Recruiting
Advertising
Premium subscriptions
Sales tools
Professional content
Learning
LinkedIn had also recently acquired Lynda.com, giving it a position in online professional education.
Microsoft wasn't simply buying a website.
It was buying a professional identity and business network.
THE $26 BILLION CHECK
Microsoft agreed to pay:
$196 per LinkedIn share
in an all-cash transaction valued at approximately:
$26.2 billion, including LinkedIn's net cash.
Microsoft's own later accounting recorded a total purchase price of approximately $27.0 billion, with most of it paid in cash.
That difference is important.
The $26.2 billion figure was the announced transaction value.
The final accounting purchase price was different because of the way the transaction was accounted for, including LinkedIn's cash and other closing adjustments.
THEN MICROSOFT MADE A STRANGE PROMISE
Normally, when a giant company buys a smaller company, people expect the smaller company to be absorbed.
New management.
New branding.
New systems.
New strategy.
Microsoft chose a different approach.
Its announcement explicitly said:
LinkedIn would retain its distinct brand, culture and independence.
And:
Jeff Weiner would remain CEO.
This was not an accidental detail.
It was part of the deal's design.
WHY KEEP JEFF WEINER?
Weiner had been running LinkedIn since 2009.
By the time Microsoft arrived, LinkedIn had already developed a large professional network and multiple business lines.
Microsoft therefore wasn't starting with:
"Here's our plan for LinkedIn."
It was effectively saying:
"You built this network. Keep running it — and we'll provide additional resources and technology."
Weiner would report to Nadella while remaining responsible for LinkedIn.
That allowed Microsoft to acquire the company without immediately replacing the leadership that had built it.
SATYA NADELLA SAW TWO NETWORKS
The strategic logic was straightforward.
Microsoft had:
Office
Outlook
Dynamics
Azure
and a huge base of business customers.
LinkedIn had:
Professionals
Recruiters
Employers
Salespeople
Job seekers
Professional data
The two companies weren't identical.
That was the point.
Microsoft wanted to connect its professional software with LinkedIn's professional network.
Microsoft described the deal as bringing together the professional cloud and the professional network.
IMAGINE THE CONNECTION
A person might use:
LinkedIn
↓
to build a professional identity
↓
Microsoft Office
↓
to create documents and presentations
↓
Outlook
↓
to communicate
↓
Dynamics
↓
to manage customer relationships
LinkedIn could provide information about the people and organizations surrounding those activities.
That created potential connections between Microsoft's software business and LinkedIn's network.
THE ACQUISITION WASN'T COMPLETED IMMEDIATELY
The announcement came in June 2016.
The deal still required:
Shareholder approval
Regulatory approval
Other closing conditions
The European Commission eventually cleared the acquisition in December 2016 after Microsoft made commitments concerning competition in professional social networking.
On December 8, 2016, Microsoft officially completed the acquisition.
LinkedIn was now part of Microsoft.
But the LinkedIn brand remained.
And so did Jeff Weiner.
THE DEAL WAS ALSO ABOUT DATA
LinkedIn had something Microsoft couldn't simply create overnight:
a professional graph.
Not just names.
Connections.
Companies.
Jobs.
Skills.
Recruiters.
Career histories.
Professional interests.
The network was constantly changing as people:
got hired
↓
changed companies
↓
connected with colleagues
↓
learned new skills
↓
looked for opportunities
That made LinkedIn fundamentally different from a static database.
It was a living professional network.
MICROSOFT DIDN'T NEED TO TURN LINKEDIN INTO "MICROSOFT SOCIAL"
This was one of the smartest structural details of the transaction.
Imagine if Microsoft had immediately changed:
LinkedIn
into
Microsoft LinkedIn
and rebuilt the product around Microsoft's existing ecosystem.
That could have weakened the identity that attracted professionals to LinkedIn in the first place.
Instead, the company retained its separate identity.
Microsoft could provide capital, infrastructure and distribution without necessarily destroying the network's original character.
THE ACQUISITION WAS ALSO BIG FOR MICROSOFT'S ENTERPRISE BUSINESS
Microsoft explicitly said the transaction could accelerate growth for both LinkedIn and products such as:
Office 365
and
Dynamics 365.
That makes the deal easier to understand.
Microsoft wasn't paying $26 billion simply for people to scroll through professional posts.
It was looking at the potential connection between:
people
companies
jobs
sales
learning
and
enterprise software.
THE CEO DIDN'T DISAPPEAR AFTER THE ACQUISITION
Jeff Weiner's role continued well beyond the acquisition.
He remained LinkedIn's CEO after Microsoft bought the company.
He later became executive chairman before eventually moving on from LinkedIn's leadership.
That is unusual enough to be the headline.
Microsoft paid billions for a company.
Then told its existing CEO:
Keep running it.
IT SHOWS THE DIFFERENCE BETWEEN BUYING A COMPANY AND BUYING ITS PEOPLE
An acquisition can destroy value if the buyer removes the people who understand the business.
The buyer may own:
the brand
the technology
the customer base
but still lose the knowledge required to operate everything effectively.
Microsoft's approach was different.
It already had enormous resources.
LinkedIn already had the network and expertise.
So the combination could be:
Microsoft's scale
LinkedIn's network
LinkedIn's existing leadership
THE $26 BILLION WAS REALLY A BET ON CONNECTIONS
At the time of the acquisition, LinkedIn already had more than 433 million members.
Microsoft believed that connecting that professional network with its own cloud and enterprise products could create new business opportunities.
That is a very different acquisition thesis from:
"This company has a lot of revenue."
It was closer to:
"This company sits in the middle of a network we don't own."
THE STRATEGY WASN'T TO REPLACE LINKEDIN
It was to connect it.
That distinction matters.
Microsoft could bring:
Cloud infrastructure
↓
Enterprise software
↓
Business customers
while LinkedIn brought:
Professional identities
↓
Connections
↓
Recruiting
↓
Sales relationships
↓
Learning
The potential value was in the intersection.
MAACAT PERSPECTIVE
Microsoft paid $26.2 billion for LinkedIn.
But one of the most unusual parts of the deal was that Microsoft didn't immediately try to rebuild the company in its own image.
It kept the:
LinkedIn brand
LinkedIn culture
LinkedIn network
and
Jeff Weiner as CEO.
The acquisition was therefore less like:
"Microsoft takes over LinkedIn."
and more like:
"Microsoft buys LinkedIn and gives it access to Microsoft's enormous ecosystem."
Sometimes an acquisition isn't about replacing what made a company valuable.
It's about giving that company a much larger machine to plug into.
