Microsoft to pay £18bn for loss-making LinkedIn site

MICROSOFT is to buy the loss-making LinkedIn social networking website for £18.5 billion.

LinkedIn, which was founded in 2003 and lost £ 116 million last year, is used by professionals to share CVs, make contacts and look for jobs.

Microsoft said both companies’ boards unanimously backed the move, which will take place before next year if it is supported by regulators and LinkedIn shareholders.

The takeover is the biggest in Microsoft’s history – dwarfing the £6 billion it paid for internet phone service Skype in 2011 and the £5.1 billion it paid for telecomms firm Nokia in 2014.

While the basic services on LinkedIn are free, the site makes money by selling premium subscriptions which make users’ profiles more visible to head-hunters.

LinkedIn, which is based in Mountain View, California, floated on the stock market in May 2011. Its membership grew by just under a fifth last year to 433 million, while the number of active job listings on the site has climbed 101 per cent year-onyear to more than 7 million.

The firm – which has launched a new version of its smartphone app in the past year – now sees 60 per cent of its users coming through mobile devices.

Richard Windsor, an analyst at Edison Investment Research, said: ‘The deal is expensive, but LinkedIn is unopposed in its space and has virtually 100 per cent market share in what it does. To really make the most of this acquisition LinkedIn needs to be seamlessly integrated with Microsoft’s other assets, particularly Office, and this is something that historically Microsoft has been very bad at.’

In May, a hacker advertised around 117 million LinkedIn logins for sale after a security breach four years ago. LinkedIn said it had resolved the issue.

‘They need to integrate seamlessly’