Microsoft's purchase of LinkedIn on June 13, Monday gives the tech giant a social network with over 400 million users. The deal is valued at $26.2 billion and will likely result in Google making a similar acquisition to boost its business customers. Earlier this year the Alphabet subsidiary was reportedly interested in purchasing some business-centered cloud apps including Namely and Shopify.
LinkedIn CEO Jeff Weiner sent an email to his employees explaining why he made the choice to sell the company. He mentioned the leadership of Microsoft CEO Satya Nadella as a key reason.
Weiner argued that Nadella has made Microsoft more innovative, flexible, and open, according to Time. The LinkedIn chief executive was already thinking about approving the deal, but got excited about Nadella's ideas for weaving LinkedIn's services into Microsoft apps including Windows, Office, and Outlook.
During the past year the search giant has made big investments in its enterprise operations. The company hopes to focus on business ads, and Google's interest in business apps causes it to go toe-to-toe with the Bill Gates co-founded company.
Microsoft's purchase of LinkedIn now provides it with personal and professional data that Google does not have. In addition, the Washington-based company has stated that LinkedIn will assist its digital assistant Cortana, according to Recode.
Google's artificial intelligence (AI) is widely considered as the best in the tech world. However, Microsoft could now have a competitive edge over Google.
Google has the cash to catch up with Microsoft. In addition, Google's enterprise Senior Vice President Diane Greene has stated she wants to expand the unit even through purchases, and there are several options.
For example, Dropbox has over half a billion users that mainly use its file storage/sharing services. However, it has not stated a vision for doing business with big companies.
Another viable option for Google is the workplace messaging app Slack. It has 3 million daily users, and about one-third of them use accounts paid for by their companies. Slack has plans to launch an enterprise version this year and is adding AI features.
There is also the cloud storage/sharing platform Box. The company's long-term strategy is to build customer applications in specific markets and connect business apps such as Microsoft's Office and Google Apps. Box's customers include General Electric (GE), The Gap, and Campbell Soup.
Here's a video of Microsoft/LinkedIn CEOs talking about the deal: