Microsoft Corp - one of the world's largest software companies, announced on Monday that it would buy proffessional social network LinkedIn Corp for $26.2 billion in cash.
The deal is the largest acquisition by Microsoft after it bought Skype for $8.5 billion in 2011.
The move came as Microsoft shifts its focus to business services and cloud computing, Microsoft CEO Satya Naadella said in an email to staff.
— Satya Nadella (@satyanadella) June 13, 2016
Nadella said the deal brings together the world's leading professional cloud with the world's leading professional network.
Under the deal, Jeff Weiner will continue to remain as CEO of LinkedIn.
Weiner said his vision is to operate LinkedIn as a fully independent entity within Microsoft, a model used with great success by companies like YouTube, Instagram and WhatsApp.
LinkedIn + Microsoft: Changing the Way the World Works https://t.co/ANoBU1Kg8d
— Jeff Weiner (@jeffweiner) June 13, 2016
According to both the firms, a “definitive” deal is sealed and would close later this year, with the support of LinkedIn chairman and controlling shareholder Reid Hoffman.
LinkedIn, which enables members to connect with similar-minded professionals and facilitates recruiting and job hunting, has carved out a social network with a distinct identity.
But LinkedIn reported a loss $46 million in the past quarter this year on top of $166 million in 2015, which put its shares at multi-year lows early this year.
Nadella said Microsoft’s data such as contacts and calendars and LinkedIn’s deeper biographical and professional network information would enable “magic” to happen.
"Imagine you're walking into a meeting and Cortana tells you about the people in that meeting because it has access to that professional network."