Microsoft made several big acquisitions over recent years under previous CEO Steve Ballmer, though many of them have not panned out as hoped. Microsoft has largely written off it’s $9.5 billion purchase of Nokia Corp.’s mobile phone business, Skype hasn’t matched the promise of integrating into other products after the $8.5 billion deal in 2011, and Yammer has been a mixed bag after the corporate social-network operator was bought in 2012. Nadella’s 2014 purchase of Mojang AB, the maker of the Minecraft video game, has been a bright spot.
When assessing acquisitions, Nadella thinks about whether the target would expand market opportunity, ride the technology waves of the future and be at the core of Microsoft, he said in an interview with Bloomberg Television. Buying LinkedIn “checks all those boxes,” he said.
For an analysis of Microsoft’s track record with acquisitions, click here.
LinkedIn has long been valued for having the potential viral growth of a social network with the recurring revenues of a software-as-a-service business. But recently, growth has started to slow and it’s been more difficult to get people to return to the site and pay for services. The company has been rethinking its strategy, redesigning its suite of mobile applications to make the product easier to use. Combining with Microsoft would give LinkedIn a boost in members with reasons to visit, making it more useful if people are sharing updates more frequently.