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Microsoft to buy LinkedIn for $26.2B in cash, makes big move into enterprise social media
By Ingrid Lunden as written on techcrunch.com
Huge news today in the world of M&A in enterprise and social networking services: Microsoft has announced that it is acquiring LinkedIn, the social network for professionals with some 433 million users, for $26.2 billion, or $196 per share, in cash. The transaction has already been approved by both boards, but it must still get regulatory and other approvals.
If for some reason the deal does not go through, LinkedIn will have to pay Microsoft a $725 million termination fee, according to Microsoft’s SEC filing detailing the merger.
The $196 per share offer is a big hike on its closing price from Friday, $131.08. (And in pre-market trading, unsurprisingly, LinkedIn’s stock has nearly crept up 64 percent to reach the share price Microsoft is paying. Microsoft’s price is down 4 percent to $49.66 in pre-market trading.)
LinkedIn is keeping its branding and product, and it will become a part of Microsoft’s productivity and business processes segment. LinkedIn’s CEO Jeff Weiner will report to Satya Nadella.
How Microsoft plans to use LinkedIn
The acquisition is a big one for both sides.
For Microsoft, it’s bringing a key, missing piece into the company’s strategy to build out more services for enterprises, and give it a key way to compete better against the likes of Salesforce (which it also reportedly tried to buy).
Today, Microsoft is focused squarely on software (and some hardware by way of its very downsized phones business). But LinkedIn will give Microsoft a far bigger reach in terms of social networking services and professional content — developing the early signs of enterprise social networking that it kicked off with its acquisition of Yammer for $1.2 billion in 2012.
LinkedIn’s wider social network, pegged as it is to groups of employees and employers, will give Microsoft a sales channel to sell more of its products, and will serve as a complement to those that it already offers for collaboration and communication.
In a section called “Selling to Social Selling” in the deck below, Microsoft details how it plans to use LinkedIn’s social graph as an integrated selling tool alongside its existing CRM products (which are second to Salesforce in the market currently). Users of Microsoft’s Dynamics CRM and other systems, it notes, will want to use LinkedIn’s Sales Navigator “to transform the sales cycle with actionable insights” — essentially lots of background information about users that can help find leads, open conversations and close deals.
There are other elements of LinkedIn’s business that are interesting to consider in light of this acquisition. LinkedIn acquired Lynda.com, for example, to spearhead a move into offering online learning tools to users — expanding on their bigger hope of being the go-to place for overall professional development. Now, with Microsoft, you can see how Lynda might be employed to help sell Microsoft software products, and provide assistance in learning to use them. This is also an area that Microsoft is already highlighting as a positive in the deal:
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There are also other areas where you will see lots of natural integrations, for example with Cortana and providing more professional networking tools to users.
“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said in a statement. “Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet.” You can read Nadella’s full memo to staff here.
(And just as a side note, this puts some of Microsoft’s recent cost-cutting through layoffs and sales into some perspective, as well.)
For LinkedIn, it puts to rest questions of how the company would ever compete with companies that are building more software on top of their social graphs that would put it into closer competition against LinkedIn. For a while, it looked like this was the direction that LinkedIn hoped to develop, but more recent problems with user and revenue growth, and a subsequent dropping share price, has put the company on the defensive.
“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,” Weiner added in the statement. “For the last 13 years, we’ve been uniquely positioned to connect professionals to make them more productive and successful, and I’m looking forward to leading our team through the next chapter of our story.” Read Weiner’s letter on the deal to LinkedIn staff here.
But this is not at all a story about a failing company getting scooped up on the way down for parts. LinkedIn, even with a share price that is below its 12-month high point of $258 per share, is one of the better-performing tech companies in the public markets.
Microsoft has never been a massively successful company when it comes to social networking — although it smartly invested in Facebook before it went public, and as we have reported before it was apparently interested at one point in trying to make a bid to buy Slack for $8 billion. LinkedIn’s social network will give it a significant foothold in this area.
LinkedIn is active in over 200 countries and has 105 million monthly active users, with 433 million registered overall. The company has some 60 percent of all traffic on mobile, and — thanks to some strong SEO — a crazy 45 billion quarterly page views. It’s also one of the biggest repositories of job listings, with some 7 million active listings currently. While some parts of LinkedIn’s business has stagnated, specifically with MAU growth (which is up only 9 percent on last year) latter is a growing business — up 101 percent on a year ago.
LinkedIn’s core business is based today around recruitment ads and, to a lesser extent, premium subscriptions for users. The recruitment business (termed “Talent Solutions”) accounted for $2 billion of the company’s $3 billion in revenues in 2015.
And as you can see from the photo above, Reid Hoffman, one of the co-founders and current chairman, is behind the deal.
“Today is a re-founding moment for LinkedIn. I see incredible opportunity for our members and customers and look forward to supporting this new and combined business,” said Hoffman in a statement. “I fully support this transaction and the Board’s decision to pursue it, and will vote my shares in accordance with their recommendation on it.”
The companies are hosting a conference call at 8.45 a.m. PT.
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NETWORKING HAPPY HOUR:
Modern Technology Trends
Any sufficiently advanced technology is equivalent to magic. – Arthur C. Clarke
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Businesses are looking to digitally transform their companies. IDC predicts that by the end of 2017, two-thirds of Global 2000 companies will have digital transformation at the center of their corporate strategy. No matter the industry, businesses of all sizes are prioritizing having modern infrastructure, easy-to-use tools and programs for their workers, best-in-class devices and making things easy for their customers. A truly digital businesses share a common trait: they collaborate differently.
In my perspective, there are two main ways that the nature of collaboration has changed:
Sharing access – The era of email attachments is coming to a close. In the cloud era, instead of passing a document back and forth, documents are co-authored – edits are made live and in real-time.
Crossing distances – The cloud allows team members to collaborate and communicate from anywhere. So the “office” of a contemporary company is wherever its workers happen to be at the moment.
For those of us who have been in the workforce awhile, these advancements are phenomenal, because the paradigm used to be so different. But those newer in the workforce have difference expectations.
To them, sharing access and crossing vast distances don’t really feel like advancements. Having grown up alongside these technologies, collaboration is just a part of work. In fact, that is the only conceivable way to work. Any business seeking to transform to be more cloud-ready and digital has to take this into account to bring in the best new talent to their teams.
Everyone knows that technologies like social media have completely changed the dynamics of corporate recruitment and hiring. But technology has also become a consideration for workers as they weigh their job options.
Modern workers spend the majority of their day interfacing with technology, so antiquated tools can be detrimental to their job satisfaction. In fact, a recent survey we conducted, showed that millennials in the workforce demand adequate technology to do their jobs. More than 90 percent of respondents said the latest technology was important in choosing an employer.
To appeal to these workers, business leaders have to recognize how they prefer to get their work done.
Shared access — How are files shared and edited at your company? Do you ever lose track of where something is or which team member “owns” it? These are hindrances that today’s workers will find it hard to tolerate. And collaborating via the cloud all but makes them obsolete.
Crossing distances — How do you organize your teams? Based on where people are located, or on who has the right skills and experience for a project? The best employee for the task may not be right down the hall from you. And the best new hire for your company may not be in the same city as you.
One great example of this modern way of working is an SMB out of the U.K., Bounce Foods. The company is the creator of Bounce Energy Balls, a healthy choice for people snacking on-the-go. Bounce Foods, like many high-growth companies, was faced with effectively managing a growing customer base, while rolling out new products and working to expand into new stores. Making the right technology decisions was a key to their success and ability to scale.
In order to keep up with their accelerated growth, Bounce Foods needed to choose tools to better collaborate internally and engage with customers externally and also keep track of processes, resources and information. As their business became more complex they decided to move to Microsoft Dynamics NAV, Microsoft Azure, Dynamics CRM and Office 365 with Power BI. These solutions helped them to scale their business.
Now, they are able to quickly respond to demand and instantly collaborate on what needs to get done. Their employees are more efficient and are able to deliver better customer service, retailer’s questions are quickly answered by the right people in the company, they can appropriately manage their stock and the overall company is better informed and better connected. Bounce Foods has scaled from 200,000 Bounce Balls per month to 600,000 in just two years. And today their product is sold in major supermarkets, gyms and retail stores.
It’s this level of technology and collaboration capabilities that employees now expect from their employers. The flexibility of the cloud is massively appealing for fast-growing companies. The functionality that it provides can in turn help ensure that companies are appealing to the right type of employee.
Every business and every business leader has to prioritize not only the needs to digitize their company but also how to enable the collaboration that workers today expect.
Using the cloud to expand your concept of collaboration doesn’t just introduce new efficiencies for your organization, it can help make your company more attractive to the best and brightest in today’s workforce.
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Liliana Ciurlino joins Managed Solution as a Marketing & Engagement Coordinator. She worked the last several years as a Regional Marketing Manager with H&R Block in the areas of new client growth strategy, execution and partnership development. She has trained hundreds of professionals on how to build their book of business in field marketing. Prior to her work in direct mail and TV advertising within the Financial Industry, she founded a 501 (c) 3 Non-Profit Organization, contACT ARTS, which produces the San Diego International Fringe Festival. In 2015, she created the World’s First Bi-National Fringe Festival (MEX/USA) and Emerging Fringe; a San Diego Regional Performance Competition for grades 6-12 to present their original work.
Liliana is a native of San Diego and has had the opportunity to live in Los Angeles, San Francisco, Sonoma, Miami, Mexico, and Puerto Rico. She holds a Bachelor's Degree in Business with a Marketing Concentration and is pursuing her MBA from Missouri State University. Liliana serves on the Latino Committee with the Oceanside Chamber of Commerce, California College Program Advisory Board and volunteers with the Girl Scouts.
Liliana enjoys playing guitar & piano, yoga, running and hiking. In Old San Juan, she studied black and white analog photography and would like to build herself a dark room. Her favorite movie is Rocky and one of her favorite quotes is by Henry David Thoreau, "It's not what you look at that matters, it's what you see". We’re excited to welcome Liliana to the Managed Solution team!
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By Sarah Perez as written on techcrunch.com
Get ready for Yammer, Microsoft announced today – and it’s not kidding. Microsoft said this afternoon it will begin to activate Yammer for all its eligible Office 365 business customers starting today, in what’s a major push for the enterprise social networking service. The rollout will come in waves, beginning with those customers who have a business subscription, and fewer than 150 licenses, including one for Yammer.
The second phase of the rollout on March 1st will expand Yammer to larger business customers, who have fewer than 5,000 licenses, but excluding those with education subscription.
The final phase, or Wave 3, starts on April 1, and will include those education subscriptions, as well as all remaining customers.
The end result of this push is that every Office 365 users with a Yammer license will be able to use the service from the Office 365 app launcher, as well as start Yammer conversations from within SharePoint, Office 365 Video Portal, and soon, Delve and Skype Broadcast as well.
Effectively, it’s elevating the product to become more of a fully-fledged member of Microsoft’s suite of tools aimed at businesses.
By being baked into Microsoft’s existing products and services, Yammer will become more useful than when it was a standalone product ahead of Microsoft’s 2012 acquisition. For example, Yammer will be hooked into the Office 365 Groups service in the first half of this year, which will let customers do things like turning Yammer conversations into Skype calls, schedule meetings with Outlook calendar, access files in OneDrive, create tasks in Planner, from within Yammer’s groups.
Yammer has fallen out of the limelight since Microsoft bought the company for $1.2 billionseveral years ago. Not much had been said about the service since. And it’s fair to say that many wondered if Microsoft ever intended to do much of anything with it, beyond making it available for those who wanted it.
But in recent months, Yammer has seen new competitors arise. Currently, its biggest competition is Slack, which Microsoft also recently had to acknowledge the importance of, in its own way – the company introduced Skype integration last month, that is. And Facebook has been ramping up its efforts with its business-focused Facebook for Work, which could pose a challenge to Yammer in the future when it becomes publicly available.
For now, however, Yammer still has a shot at grabbing a foothold thanks to Microsoft’s big push to its Office 365 commercial customers.
With the rollout, Yammer will be switched on by default, though Microsoft says that admins will be able to dial that back, if need be, noting that “if you are not ready to fully adopt Yammer in your organization, you can un-assign Yammer licenses for those who should not access Yammer from Office 365.”
Well, seems like it would just be easier to go live on Yammer than have to go around turning it off for people, doesn’t it?
More details on the Yammer integration is available here.
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Alecia Aktabowski began working at Managed Solution on Monday, April 25, 2016. Alecia lived 13 years in Indiana and 13 years in Georgia before moving to San Diego. Alecia is married with a super independent daughter, Ella and 2 incredibly dependent dogs, Cami and Monty.
Alecia joins us from SIGMAnet, where she managed professional services projects and tier 3 engineer scheduling and escalations.
When Alecia isn't in the office she enjoys hiking, shopping, going to Ella's school functions, doing hair, and eating dessert. Alecia can't swim despite her husband being a rescue swimmer. We are excited to welcome Alecia to the Managed Solution Team!
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RIGHT NOW @Microsoft Store, Chandler Fashion Center: Licensing Expert, Sean Ferrel, President and CEO, Managed Solution is explaining instant ways to convert costly technology capital expenses to operating expenses while eliminating waste by taking advantage of huge changes to Microsoft’s licensing programs.
Managed Solution is holding Breakfast, Lunch and Happy Hour events in an area near you now through June to help business realize bottom line growth through Pay as you Go Licensing and Services, Blended IT, Technology Lifecycle Management, and more.
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How Microsoft is Empowering a Modern, Sustainable Workplace
Since joining Microsoft in 1991, the only constant for Bev Hess has been a remote workstyle. Bev started her career as an account rep based in St. Louis, often logging thousands of miles in the car or flying to client sites or meeting with customers over the telephone. She’s held a number of roles in the field, eventually rising to sales management and then pursuing a passion to empower others with better technology, first as a loud voice in the field and now managing a large global team as part of the Microsoft IT organization.
Today, Bev rarely sees many of her 139-person team in person. Her typical day starts with a mere 30-second commute to her home office in California, more than 1,100 miles away from Microsoft’s corporate headquarters in Redmond, Washington. But she’s also connected and productive wherever she may be, whether out walking the dog, running errands, or even training for an upcoming triathlon. She appreciates having the flexibility to blend life as a mom with the challenges of building long-lasting professional relationships and running a high-performance team at one of the world’s largest technology companies. For her, life couldn’t be more balanced.
For Bev, “Skype for Business is my #1 tool. It’s how I start and end my day.
Skype for Business is now the norm for getting things done
Skype for Business has become the equalizing force that is changing how we work. It is not only helping to reinvent productivity, but also helping to decrease the need for commuting and business travel, which is good for our people, our business and the planet.
While Bev has always been successful as a remote employee, she says “I get a lot more done today.” In the days of audio-only tele-conferencing and conference room meetings, meetings would often start without her and “I’m sorry you can’t see this” was an all-too-common apology. These days, Skype for Business has become the norm for how work gets done at Microsoft. And many people meeting her for the first time over Skype don’t know that she—and most of her team members—aren’t in a corporate office.
Skype for Business combines audio and video conferencing, instant messaging, and screen sharing into one app that works on any device. Meet collaboratively one-on-one or with hundreds of people, or broadcast meetings to thousands of people.
Today Bev can’t imagine working without Skype. She hires people over Skype, conducts people reviews over Skype, and even occasionally fires people on Skype. “If someone isn’t comfortable getting hired without meeting their manager in person, they simply aren’t a fit for my team.” This way of doing business has also helped her to retain great people that needed to change location or workstyle—all while empowering them to be just as effective as they could be in a corporate office. For example, she recently hired a young data scientist in France that has lectured at MIT and is considered a rising star in her field.
“I think the Microsoft work culture and technology environment is what has enabled me to attract such exceptional talent.”
All told, Bev’s team is spread over 23 countries. To accommodate team members in various time zones, her workday commonly spans from 5 AM to 10 PM, though she hardly notices. She benefits through a flexibility to interweave her professional and personal lives, and Microsoft benefits by getting twice the availability of a typical 9–5 office worker. She also works to be open and available and sets aside time each week as open “office hours” for her team to drop by virtually via Skype and talk about anything.
Her team represents a perfect example of the modern workplace. While some of her team work in larger offices, many others work in remote or satellite offices with only a handful of employees. Others telecommute from rented office or flex space in their local city. And others, like Bev herself, work on the go, making their home or a hotel room their office. Regardless of where they are, Skype for Business is the equalizing force that empowers every team member to be productive whenever and wherever they may be, helping Microsoft realize greater value from its workforce.
85 percent of Bev’s team—including Bev herself—is located outside of Redmond.
A sustainable way of doing business
At Microsoft, we’re committed to demonstrating environmental leadership. In 2012, we made a commitment to become carbon neutral across our operations, including data centers, development labs, offices, manufacturing, and business air travel. We see Skype as an important component of our environmentally responsible operations and as a catalyst for reshaping how business gets done in the future—at Microsoft and around the world.
For example, many of our people now attend town meetings, our annual Company Meeting, and large conferences virtually. Skype has provided globally-distributed teams the ability to meet more often and more conveniently, helping people stay more connected and also increasing the speed at which we do business.
Skype has also afforded more frequent customer contact, helping lessen the need for on-site travel by our sales teams. Virtual meetings and demos of solution capabilities help ensure sellers remain responsive to our customers’ needs and include all stakeholders, regardless of where they may be. When Bev thinks back to her time as a seller, she sees a night-and-day difference between how she worked back then and how our sales teams work today. “Skype is the catalyst that is enabling us to adopt a more sustainable way of doing business without sacrificing the strong relationships we desire with our customers,” she says.
As virtual meetings become increasingly commonplace, people are spending less time commuting to work and are flying fewer miles to attend remote meetings and events. This reduced need for travel is helping us avoid carbon emissions, which is both good for the environment and good for business. Additionally, as more of our employees work remotely, Skype is effectively helping us to minimize our office space and the emissions associated with our buildings. In fact, the Global e-Sustainability Initiative’s (GeSI’s) SMARTer 2030 report estimates that virtual meetings and working remotely could reduce commuting globally by up to 53 percent and reduce the number of business trips by car or plane by 80 percent by 2030, potentially saving 165 billion liters of fuel from transportation.
Transforming enterprise IT
Skype for Business is an important enabler of a more sustainable way of doing business, helping us to reduce emissions from business air travel as well as emissions in our private data center. For example, as we shift from managing communications in our own facilities to a fully cloud-based Skype for Business environment, we expect to reduce associated data center emissions by 30 to 60 percent per user.
Moving to an IP-based collaboration environment also provides us with an unprecedented ability to analyze and manage our communications infrastructure. Bert Byerly is the Skype for Business service engineer for Microsoft IT and constantly monitors the environment, watching for trends and working to constantly improve service levels. “Reliability is at an all-time high, with call quality now at more than 95 percent,” he reports.
Final thoughts
As Bev thinks back to just how much Skype for Business has helped transform Microsoft into a modern, sustainable workplace, she’s excited to see the role Microsoft is playing in the world, both in empowering people and businesses and helping to reduce carbon emissions with technology.
