A new report claims Microsoft's final price to acquire LinkedIn was 22% more than planned, due to several competing bids from Salesforce.
In a filing made by LinkedIn late on Friday to the U.S. Securities and Exchange Commission, the business-themed social networking service stated that Microsoft originally offered LinkedIn a deal on May 4 that was worth $160 a share in cash. However, another company, referred to by LinkedIn as "Party A" in the SEC filing, had actually proposed a bid a few days earlier for between $160 and $165 a share in a cash-share deal.
The Wall Street Journal reports that "Party A" was in fact Salesforce:
The bid from Salesforce put pressure on Microsoft to boost its offer several times. Even after LinkedIn entered an arrangement to negotiate with Microsoft exclusively, Salesforce persisted on pushing its bid. And as its stock price climbed, the value of its offer grew as well, leading LinkedIn executives to press Microsoft for more money.
Microsoft ended up on the winning side of the bidding battle, but it had to pay $196 a share to do so, or about $5 billion more than its original price. Microsoft agreed to pay $26.2 billion in cash for LinkedIn in mid-June, and the deal is expected to close by the end of 2016.
According to the site Recode there were two other parties also trying to buy LinkedIn with Party B being Google, and Party D being Facebook.
Reader comments
Microsoft reportedly paid much more for LinkedIn due to bidding from Salesforce
So it was a defensive buy: part opportunity and mostly to keep it out of SF, Google and FB.
Massive chunk of change, that will put a huge dent in the cash war chest. Looks like they were played and took the bait..... and hook, line, sinker, rod, fisherman, boat and a big chunk of the ocean.
Google and FB laughing all the way to the bank
LinkedIn is the FB of business. Yeah, they paid a lot, but all that info.....
Wonder how it will integrate with O365....
Wonder how it will play with AD?
They bought Lynda.com.....wonder wihat will happen with that?
Lynda will be scrapped in 3 months, followed shortly there after by linkedin
^This lol
To quote Dr. Evil. "It's like watching two bald men fighting over a comb."
It'll be worth it alone for Lynda.com. Imagine getting Lynda's tutorial videos as part of Office 365.
Ive used Linkedin professionally from pretty much day 1, seen it change. MS got a good deal, the potential is massive, those mentioning Nokia havnt got a clue what they are talking about. Completely different, cant be mentioned in the same sentence, its like comparing fish to dirt on mars. Will be exciting to hopefully get back features that linkedin removed to moneytise the site, a bad bad decision.
This story taught us that money is very fking important.
anyway, rip linkedin
MS didn't need to buy LinkedIn. This looks like it was Nadella trying to make a point about his organizations focus on Enterprise.
everyone here is acting like a pro business analyst :).
We can't guess much worse then the pros, for they know not what the future holds either...
Don't you know, everyone on Windows Central is a member on Microsoft's board and has a direct line to Satya's personal phone. How could they not know all the ends and outs of this acquisition?
What a shame, Satya spent billions on a declining social, and totally failed on mobile with 0 marketing. Send him home please, he will ruin the company.
He and Trump should become running mates. They both live in their own little world of bs and make believe.
As has been the case with every company MS acquired under Nadella. Every. Last. One.
It's not worth the amount paid, but then what is.
The amount of business data etc is priceless, I'd not be surprised if they give pro version of Linkedin free with office 365.
What matters, is what they were thinking. Sure, $26B seems to me to be well beyond a premium price for Linked In, especially considering where else the money could have been spent, and all the layoffs of talented people around the world. I thought money and expenses were tight at MS! So, and this isn't rhetorical - what factors were they weighing when they made this decision? Because it's a big one.
Lots of money for loss making social network. Perhaps Nadella will outsource developing soon to non paid 'insiders' as scheme is working so well for QA.
Should have bought twitter at a less price or snapchat(hard)
How about MSFT back off now and let see if salesforce can cough up the dough.
Should have spent 26BN on advertising for mobile instead
Ugh salesforce... I don't even want to hear that word. I work for tmobile and we use salesforce daily and its truly terrible..
yea lets party, if they bought tesla or something i would be happy but this is like a gramma meeting another gramma
You don't know much about tech, do you..?
Tesla is another loss making bubble. Could be Nadella's next target :)
Can someone explain to me how this deal will be worth $26 billion? is integration with office really worth that price? even though they could have pursued a partnership?
I think pretty much everyone here thought the deal was not worth $26 billion and that Microsoft grossly overpaid for a risky acquisition. Now, we know for sure they did. If I were Satya, I would've pulled out once it turned into a bidding war. $26 billion for a niche and possibly past-its-prime website that isn't even profitable? No thanks.
The only big company they should be acquiring right now is AMD. There are so many benefits that would come from it, it's just insane they just don't throw cash at AMD instead.
No, amd is hardware. If MS goes to Amd, would be another Nokia.
PS uses AMD chips, getting it will be a benefit. Do your research.
I guess it wont be that similar to another Nokia, but instead it will hurt Microsoft+Intel relationship that way. So I even think that's not even gonna happen, especially when it comes to PC CPU-manufacturing which sounds inviting for anti-trust courts. Microsoft is still hugely dominant in PC space, not just having large marketshare alone, there is still a boundary before somebody will scrunitinize them.
Nokia acquisition at that time were a necessity for the survival of Windows Phone and even for Nokia's survival not to completly bleed the whole company. If Nokia weren't struggling too much, maybe the acquisition might not happen.
But that may fuel the competition b/w intel and AMD..currently intel has became very lazy in developing something new in their processors mainly for the ultrabooks or tablet CPUs. Its need more mobile like(QUALCOMM) CPU features I think.
And by doing that they would alienate their biggest partner which is Intel. One should think before speaking.
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And Nvidia, don't forget Nvidia
Then intel will be forced to bring more advanced CPUs.
Do you like AMD? I would not wish a microsoft aquisition on my worst enemy. Instant failure and destruction of said aquisition.
It's funny how you say "everyone here", as if ANYONE here knows wtf they are talking about regarding damn near anything. Lol.
I agree 100%. Though I'm not sure what ms wants to do with LinkedIn, I feel they should've rather pursuit a partnership. But our savior Satya will make it work... Right?
It's all about the data and Linkedin has a lot of it. And not garbage data like facebook. It's the type of data that even facebook would love to have.
They would have bought it if that's the case. Yet they did not. Mastermind got tricked badly.
While not worth 26 billion, Microsoft has been strongly targeting businesses with their products and services much more than before. Windows 10 mobile devices also are being geared more towards businesses than consumers. Continuum and HP Elite X3's virtual win32 apps clearly where developed with business users in mind.
By buying Linkedin, they are essentially receiving a lot of data related to businesses as well as users (mostly adults) who either are running a business, managing one or employed by one ...so in short it's giving Microsoft access to a large amount of users and data that they want while also gaining an already existing program/website which is already established and has lots of traffic.
Linkedin is also installed on most users devices, so surely there are advantages in that as well.
If MS starts misusing the data then writedowns will come even earlier. Every company that competes with MS will issue blanket ban of LinkedIn. Good business opportunity to all LinkedIn competitors.
As i said before. Data mining tech/patents/expertise. The office stuff is just another plus.
Data mining is Google's job.
Facebook and google are way ahead of MS in that area. MS needs all the help they can get. Especially if they are pushing the field of artificial intelligence and personalized experiences.
You just said a company as huge and overall successful as Microsoft "needs all the help it can get"... You all need to stop. Seriously.
Hold on, let me call Bernie Madoff
I just took a management class for an accounting degree and our first assignment was to create a very fleshed out LinkedIn profile. The school seems to feel that LinkedIn is the future of resumes/employment opportunities.
Hopefully there's still money set aside to finally update the Windows mobile app.
Exactly!
I expect LinkedIn to be very tightly integrated with other MS products like Office.
Of course MS will develop first class universal Windows app. No question about that.
I wished they've thrown the money for the R&D of Windows Phone.
The bottom line is MS paid the market price. Of course LinkedIn business is not worth 26 billion.
In reality there are 3 big social media companies: Facebook (incl Instagram), Twitter and LinkedIn. So potential is missive.
If you think about it, better MS then Google or any other company. So overall is good deal if you have the cash.
I could argue the same point... In reality there are 3 big mobile os: Android, iOS and windows. So the potential is massive.
Even though you have the cash, doesn't mean you should spend it. Cash after all is a limited resource. I would've like more R&D in Windows mobile (hardware and software) and MARKETING. I still don't get the sale. I don't see the potential but I guess time will tell...
It's about the data mining tech/patents/expertise. And they are spending lots on phone indirectly hence why you have more apps coming than you've had in a while. Building the ecosystem takes priority to phone hardware. No hardware will help if the ecosystem is poor.
No, there are 2 big mobile OS. Windows mobile is utterly miniscule.
They bought Yammer and look how that turned out.
I don't see them doing anything on it.
And Skype, too.
And Nokia too lol.
What do you really know about Yammer to say that...? Its an enterprise social network...my company started using it less than a year back and its already got a significant number of users...its a big success elsewhere too as far as I see.
No it's not a success.
It's a failure that will soon be discontinued.
Since they took over, they haven't published a single update to PC or WP app.
It is also limited in it's function...
Actually it only has two functions....
1. Chats
2. Uploading a file for a reason I can't figure out.
True, the wp app isn't all that good. But unfortunately that is not a measuring stick for success in the current state of the market. And since its an enterprise network, we dont need facebook level sophistication when it comes to functionality. Also, fyi- having tried the android app for Yammer, these two are definitely not leagues apart.
Their apps can improve. But the website and overall usefulness is excellent. You ought to take a second look at the aspects that you base yammer's success on.
EDIT: Also, am curious to know if you've actually used the network at your company. Do elaborate if you have the time.
We tried it as a start up company of a few members based in different locations before we leased office space.
It did not offer anything more than what a Facebook group or even WhatsApp group could do.
Having people in different locations is why I introduced it to begin with.
It wasn't all that productive and once we were in one place it became redundant
Give it 6 months and they'd have killed and sold for a huge loss, bit like Nokia mobiles.
Better that MS bought it? Why is that? If it is mismanaged by MS, which is what they do, MS will have to sell it at a loss, fire people, and/or write off more losses...I don't see how this can actually be any good for Ms. They should have stayed away from this business model - it is not tech.
linkedin will operate independent. much like instagram works in facebook, or youtube in google, or even better, whatsapp in facebook. nokia on the other hand was bought to dissolve it into microsoft's divisions.
MS did not buy Nokia.