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Reasons Microsoft Wasted $26.2 Billion To Buy LinkedIn
http://www.forbes.com/sites/petercohan/2016/06/13/4-reasons-microsoft-wasted-26-2-billion-to-buy-linkedin/#768f7c0a533d
Peter Cohan , CONTRIBUTOR
I write about tech stocks and the startup economy.

Microsoft just announced a deal to pay $26.2 billion to acquire business social network, LinkedIn. It fails the four tests of a successful acquisition.

While the deal certainly rescues LinkedIn from a huge growth problem that slashed the value of its shares in February, it is unclear how Microsoft will generate a return on that $26.2 billion investment.



Microsoft CEO Satya Nadella (R) shakes hand with Indian Minister of State for Finance Jayant Sinha MONEY SHARMA/AFP/Getty Images

Microsoft will “pay $196 per share in cash for the professional social network, representing a 50% premium over LinkedIn’s last closing price,” according to FORBES.


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Why would Microsoft do that? “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,” says CEO Satya Nadella in a press release.

LinkedIn CEO Jeffrey Weiner — who will stay on as CEO after Microsoft completes the deal — said in a statement, “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.”