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In a short interview in the wake of the just-announced deal to buy LinkedIn for $26 billion, Microsoft CEO Satya Nadella said that the business networking site will be treated in a more hands-off manner than previous acquisitions of Skype and Yammer.
Instead, he compared it to transactions like Google’s purchase of YouTube, Facebook’s of Instagram and even Microsoft’s buy of Minecraft owner Mojang.
"We absolutely want to approach it differently," said Nadella of the LinkedIn acquisition, who noted that he was considering "what does it mean to give the culture and brand the capability to flourish and room to breath ... We are going to break some new ground."
Well, not too new — although LinkedIn CEO Jeff Weiner will retain that title and Microsoft has said it will also be able to run independently, its financial results will now be rolled into Microsoft’s productivity and business processes unit.
(In other words, it might never be clear again how healthy — or not — the LinkedIn business is going forward.)
While Nadella said he thought that the purchases of social networking service Yammer in 2012 and communications service Skype in 2011 had worked well, others inside and outside Microsoft point to those deals — both done under former CEO Steve Ballmer — as less than ideal. Leaders from both those acquisitions have left the company and the services have been heavily integrated into existing businesses and more focused on revenue than becoming bright centers of innovation. Neither has seen the growth they were once famous for.
"They have been integrated to death," said one person inside the company, who noted that the use of their brand names did not mean that the promise at the time of their purchase had been realized.
Weiner said that will not be the case for LinkedIn, who noted the company was facing the issue of how to grow its business going forward. There has been "a redefinition of scale in the modern world," said Weiner, who said that tech titans like Microsoft, Google, Facebook and Apple were seeing huge gains in market cap.
"Arguably this is unprecedented, so you think about the way the world is evolving," said Weiner, who said LinkedIn could move to a much different level with Microsoft’s help. He and Nadella, as well as LinkedIn chairman Reid Hoffman, had been talking since March.
While he insisted the company could have gone it alone , LinkedIn’s explosive growth had fallen off of late and Wall Street had soured on it after recent financial forecasts by the company created worry about its forward prospects.
Good move by Weiner then — at $196 per share, LinkedIn shareholders got a 50 percent premium to its closing price of $131 on Friday.
This article originally appeared on Recode.net.
