Microsoft is buying the professional networking website LinkedIn for $US26 billion in cash, the biggest ever acquisition by the software giant.
Microsoft CEO Satya Nadella. Photo: AFP
Microsoft chief executive Satya Nadella said he had been tracking LinkedIn for some time and the deal was about improving connectivity and productivity.
"It's about riding the next wave of technology, it's about AI (artifical intelligence), it's about social, mobile and cloud and bringing those things together," he told the BBC.
He said the merger played to the software giant's strengths and core business.
"When you think Microsoft you think about knowledge, work and productivity and there's no better way to realise that mission than connecting the world's professionals making them more successful and productive."
Mr Nadella said LinkedIn's distinct culture and brand would be preserved.
The chairman of LinkedIn, Reid Hoffman, said the deal was a re-founding moment for the professional network that has more than 430 million users around the world.
Reid Hoffman. Photo: AFP
"I see incredible opportunity for our members and customers and look forward to supporting this new and combined business."
Mr Nadella said Microsoft had a history of buying businesses and integrating them into the group, ranging from Power Point to the Minecraft game, and Skype.
However, Microsoft also bought the mobile phone maker Nokia in 2013, which it has since written off.
An analyst said the deal would offer Microsoft a ready made market for its products.
The acquisition makes sense in respect of Microsoft's link with enterprise in its cloud platform and portfolio of enterprise business services, it will help Microsoft build out its enterprise services capabilities," said Mark Skilton of the Warwick Business School.
He said LinkedIn has been struggling with slow user growth and falling net income.
LinkedIn's shareprice has fallen around 40 percent so far this year, and Microsoft's offer is nearly 50 percent above LinkedIn's closing price on Friday. It closed up 47 percent today while Microsoft was down 2.6 percent.
