In one of the biggest acquisition in 2016 Microsoft buys LinkedIn for a whopping $26.2 billion. The LinkedIn acquisition is just the latest tool in a robust palette of office software, including Office 365, Yammer, Skype, and the calendar app Sunrise. What LinkedIn brings to the table is recruitment technology, training tools through Lynda, and big data about companies and individual professionals and their networks. Because LinkedIn is a social network, it could also help bring together some of the many tools that Microsoft has been acquiring.
For a better sense of where the bubble might be, consider how Microsoft is raising the cash to fund the deal. The money will come entirely from new bond issues, adding about $25 billion to a debt load that has already increased by about $15 billion over the past year Corporate debt issuance has surged since the 2008 financial crisis for a variety of reasons, including central banks’ easy-money policies, low or negative interest rates in much of the developed world and foreign central banks’ more recent moves to purchase corporate bonds directly. In the US, corporate bonds outstanding amounted to 27% of gross domestic product as of March 2016, up from 20% at the end of 2007
In so many ways this acquisition although at a very high price tag makes a lot of sense. I see this projecting Microsoft into the use and professional arena. Combined with the cloud services and Skype, if done right and if integrated properly, could push Microsoft into brand new areas of business, which organically would have taken Microsoft a decade to get to and frankly may have been too little, too late.