Did Microsoft Pay Too Much For LinkedIn Acquisition?

By Emily Marks | Jun 16, 2016 12:21 PM EDT

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Microsoft has finalized the acquisition of LinkedIn this week with a $26.2 billion agreement. The professional social network will still retain its brand, culture and independence.

Engadget reported that Microsoft's acquisition of LinkedIn is part of the company's efforts to integrate the professional social network into several of its apps and services. These include Office, Skype as well as Cortana.

Microsoft will buy LinkedIn's shares at $196 each. The $26.2 billion deal is part of the all-cash transaction and will include the career-oriented social network's net cash.

Jeff Weiner will continue to be the CEO of LinkedIn. He will report to Microsoft CEO Satya Nadella. The transaction is expected to be fully closed this year.

"The LinkedIn team has grown a fantastic business centered on connecting the world's professionals," Nadella said. ""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."

Last year, the professional social network also acquired Lynda.com, an online learning platform. It has launched a new version of its mobile app which has resulted to an increase in member engagement.

LinkedIn has seen a 19 percent growth year over year to more than 433 million members all over the world. It has over 105 million unique visitors per month and more than 7 million active job listings.

According to The Motley Fool, Microsoft may have risked too much for the acquisition of LinkedIn. The publication noted that the deal makes sense since it would help the company's corporate strategy and could result to a "lucrative stream of profits" for the tech giant.

The LinkedIn deal is definitely a major gamble for Microsoft. The tech giant has previously had big losses for some of its multibillion-dollar acquisitions such as Nokia and aQuantitative. There is also the possibility that the company would lose its triple-A credit rating as a result of the acquisition.

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