Microsoft Stumps Up $26 Billion Cash To Buy LinkedIn

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Written By Mahmoud Sarvari

Software giant Microsoft is buying social network LinkedIn in a massive surprise $26 billion deal.

The cash purchase is the highest price paid by Microsoft to acquire another company.

LinkedIn is a global social network for entrepreneurs and business people with a claimed 430 million registered users – but hundreds of thousands may have accounts that are inactive.

The deal values each member as worth $60 to Microsoft.

The valuation puts a premium on LinkedIn shares, which rallied after the news of the acquisition was released by around 50% to $190.

Microsoft has promised LinkedIn will keep the same identity and says the network will help the software company sell professional products to business customers.

Chequered past with acquisitions

Microsoft does not have a good track record with acquired companies.

The directors have written off $9.5 billion paid for Nokia in 2012 and $6.3 billion to acquire online advertising agency aQuantive.

The purchase of Skype has progressed better, but has not set the world on fire.

The deal has also set tongues wagging about the future of Twitter, which many financial commentators believe has lost ground on competitors in recent years.

Microsoft is also closing in on another controversial deal – buying software company Kind Financial.

On first look, buying a software rival to swallow R&D costs on a new package is what big companies do, but in this case, the acquisition is a leader in America’s fast-growing cannabis industry.

Kind Financial writes software for cannabis farms that manages crop performance. tracks inventory, flags legal problems and keeps a record of sales.

Cannabis investment

Five US states have voted through laws to legalise the medical and recreational use of cannabis at the same time as governments in other countries, such as the UK, are tightening laws.

Some businesses suggest investing in cannabis is like putting money up for the porn industry.

Matthew Kames, of marijuana data company Green Wave Advisors said: “We all know that porn generates a lot of money but it’s just something we don’t want to invest in.

“Big companies often view cannabis the same way, but Microsoft has broken the mould.”

Microsoft has not commented on the acquisition or the price of the deal.

However, the company is based in Seattle, Washington, one of the states where cannabis is legalised.