HomeWinBuzzer NewsSalesforce Entered Bidding War with Microsoft for LinkedIn

Salesforce Entered Bidding War with Microsoft for LinkedIn

Microsoft was not alone in its interest in LinkedIn, with the company having to see off Salesforce before closing its mega deal to buy the company.


Interestingly, it seems that Microsoft was not the only company interested in buying LinkedIn, with Bloomberg reporting that Salesforce was sniffing around the enterprise-oriented network too. Microsoft announced the transaction earlier in the week, and it seems that the company only acted on its interest in LinkedIn when told of interest from another bidder.

CRM giant Salesforce apparently gave LinkedIn a “solid look” but lost out in a bidding war that ultimately became too steep. Microsoft had held a long term (albeit secretive) interest in LinkedIn and was mulling over the prospect of a transaction when LinkedIn executive chairman Reid Hoffman and CEO Jeff Weiner told Microsoft head Satya Nadella of another company’s interest.

This pushed Nadella to open the bank account and splash multiple billions of dollars on the network, a deal which was praised by Bill Gates today in a brief interview.

Microsoft’s decision to buy LinkedIn for $26.2 billion completed the third biggest tech deal in history (fourth if we count Time Warner’s purchase of AOL). It was the kind of industry shaking deal that does not come around too often and was doubly impactful considering it came from virtually nowhere.

Rumors had pointed to Microsoft bidding for Yahoo, Slack, and other companies that were not LinkedIn. So, when the company did drop that cash (the purchase was all in cash), in Microsoft fashion it did so by overpaying for what it got. It is a strategy Microsoft has employed in the past, overpaying for the Nokia Lumia division and Skype to name a few.

Skype worked, Nokia didn’t, so what happens with LinkedIn will only be decided after a number of years. However, right now it is worth asking why did Microsoft decide to pay $1.96 per share for LinkedIn, a price that was over 50% higher than the last Friday’s closing share price?

It is unlikely that the presence of Salesforce pushed the price so high, especially as the company looks to have pulled out once the cost became excessive. It is a question being asked by investors and analysts, and at the moment it seems to come down to the old romantic Microsoft belief that it can really merge its services and create something better.

Only time will tell if that is possible.

Luke Jones
Luke Jones
Luke has been writing about all things tech for more than five years. He is following Microsoft closely to bring you the latest news about Windows, Office, Azure, Skype, HoloLens and all the rest of their products.

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