Nadella: Buying LinkedIn for $26.2bn was better than partnering with it

Since the publication of Microsoft CEO Satya Nadella's book Hit Refresh a few days ago, some interesting facts about the company have made their way to the general public. These include the revelation that the executive voted "no" on the Nokia deal, and that Steve Ballmer and Bill Gates were against the acquisition of Minecraft developer, Mojang.

Nadella has also shed light on some of the many reasons behind Microsoft's $26.2 billion acquisition of professional networking platform LinkedIn, in 2016.

According to Nadella, the primary reason for Microsoft's big decision was that the company believed that it was better to outright buy LinkedIn rather than entering into another partnership with it. The executive explains that:

I am often asked, “When is a partnership appropriate as opposed to an acquisition?” The answer is best framed as another question, “Can we create more value for customers by coming together as one entity or as two?” In my experience, whether we’re talking about a gigantic acquisition like our deal to purchase the social network LinkedIn or smaller acquisitions like those of app developers Xamarin, Acompli, and MileIQ, the acquisitions that succeed generally start as partnerships born out of careful analysis of customer needs. That was the case with LinkedIn, which Microsoft acquired in 2016 for $26 billion, one of the largest such deals in history.

For more than six years, Microsoft and LinkedIn worked together to enable our one billion users and their nearly half-a-billion members—the Venn diagram of our customers would overlap 100 percent with theirs—to synchronize contacts so that Office contacts were available in LinkedIn and vice versa. [...] For us to do even further integration, and create more compelling scenarios and value for our customers, we had to come together as one.

Nadella further stated that even LinkedIn's CEO saw it as a move that showed that Microsoft is "increasingly becoming more agile, more innovative, more open, more purpose driven".

The Microsoft CEO went on to say that through the company's acquisition of LinkedIn, it aims to build a network of professionals and alliances which will help provide resources and opportunities for individuals around the world. In the last chapter of the book, titled "Restoring Economic Growth for Everyone", Nadella has also emphasized that he has a tendency of investing in services which help people become more productive, such as LinkedIn and Office.

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