The ability for LinkedIn to remain a “fully independent entity” under Microsoft was a key factor in sealing the $26.2 billion acquisition agreement between the companies, LinkedIn CEO Jeff Weiner says in a memo explaining the deal to employees.
“Long story short, Satya had me at ‘independence,’ ” writes Weiner in the memo, posted on LinkedIn, referring to Microsoft CEO Satya Nadella. “In other words, his vision was to operate LinkedIn as a fully independent entity within Microsoft, a model used with great success by companies like YouTube, Instagram and WhatsApp. I would remain as CEO and report directly to him instead of a board.”
As Weiner suggests, that approach of letting the acquired company remain independent is becoming increasingly popular, and in many cases successful, as large tech companies bring popular tech brands into the fold.
Here’s an extended excerpt from the LinkedIn CEO’s memo.
In order to pursue our mission and vision, and to do so in a way consistent with our culture and values, we need to control our own destiny.
That, above all else, is the most important rationale behind today’s announcement.
At this point, some of you may be thinking this sounds completely counterintuitive: How will we be more likely to control our own destiny after being acquired? The answer lies in both the way in which the world has been evolving and the unique way in which this deal will be structured.
Imagine a world where we’re no longer looking up at Tech Titans such as Apple, Google, Microsoft, Amazon, and Facebook, and wondering what it would be like to operate at their extraordinary scale — because we’re one of them.
Imagine a world where we’re not reacting to the intensifying competitive landscape — we’re leading it with advantages most companies can only dream of leveraging.
Imagine a world where we’re not pressured to compromise on long-term investment, hesitant to disrupt ourselves, or hamstrung in the way we can reward and acquire new talent due to stock price concerns, but consistently investing intelligently toward the realization of our mission and vision.
And imagine a world where a global economic downturn doesn’t limit our ability to execute, but reinforces the essential quality of our purpose and actually strengthens our resolve when people need us most.
With today’s news, we won’t need to imagine any of it because it’s now our reality.
Some of you may be asking “Why Microsoft?”
Long before Satya and I first sat down to talk about how we could work together, I had publicly shared my thoughts on how impressive his efforts were to rapidly transition Microsoft’s strategy and culture. After all, it’s extremely rare to see a company of that scope and scale move so quickly to make fundamental changes.
The Microsoft that has evolved under Satya’s leadership is a more agile, innovative, open and purpose-driven company. It was that latter point that first had me thinking we could make this work, but it was his thoughts on how we’d do it that got me truly excited about the prospect.
When Satya first proposed the idea of acquiring LinkedIn, he said it was absolutely essential that we had alignment on two things: Purpose and structure. On the former, it didn’t take long before the two of us realized we had virtually identical mission statements. For LinkedIn, it was to connect the world’s professionals to make them more productive and successful, and for Microsoft it was to empower every individual and organization in the world to achieve more. Essentially, we’re both trying to do the same thing but coming at it from two different places: For LinkedIn, it’s the professional network, and for Microsoft, the professional cloud.
Both of us recognized that combining these assets would be unique and had the potential to unlock some enormous opportunities.
- Massively scaling the reach and engagement of LinkedIn by using the network to power the social and identity layers of Microsoft’s ecosystem of over one billion customers. Think about things like LinkedIn’s graph interwoven throughout Outlook, Calendar, Active Directory, Office, Windows, Skype, Dynamics, Cortana, Bing and more.
- Accelerating our objective to transform learning and development by deeply integrating the Lynda.com/LinkedIn Learning solution in Office alongside some of the most popular productivity apps on the planet (note: 6 of the top 25 most popular Lynda.com courses are related to Microsoft products).
- Realizing LinkedIn’s full potential to truly change the way the world works by partnering with Microsoft to innovate on solutions within the enterprise that are ripest for disruption, e.g., the corporate directory, company news dissemination, collaboration, productivity tools, distribution of business intelligence and employee voice, etc.
- Expanding beyond recruiting and learning & development to create value for any part of an organization involved with hiring, managing, motivating or leading employees. This human capital area is a massive business opportunity and an entirely new one for Microsoft.
- Giving Sponsored Content customers the ability to reach Microsoft users anywhere across the Microsoft ecosystem, unlocking significant untapped inventory.
- Redefining social selling through the combination of Sales Navigator and Dynamics.
- Leveraging our subscription capabilities to provide opportunities to the massive number of freelancers and independent service providers that use Microsoft’s apps to run their business on a daily basis.
And these are just some of the ideas that have been discussed since our first meeting.
Turning from purpose, we focused our attention on potential structure. I had no idea what Satya was going to propose, but knew how difficult acquisition integrations could be if not established the right way from the start.
Long story short, Satya had me at “independence.” In other words, his vision was to operate LinkedIn as a fully independent entity within Microsoft, a model used with great success by companies like YouTube, Instagram and WhatsApp. I would remain as CEO and report directly to him instead of a board. Together, along with Reid, Bill Gates, my former colleague Qi Lu, and new partner Scott Guthrie, we would partner on how best to leverage this extraordinary combination of assets while pursuing a shared mission. This, we both agreed, might not only be a structure that could work, it would be one in which both companies could thrive.
Now onto the most important question: What does this mean for you specifically as an employee of LinkedIn?
Given our ability to operate independently, little is expected to change: You’ll have the same title, the same manager, and the same role you currently have. The one exception: For those members of the team whose jobs are entirely focused on maintaining LinkedIn’s status as a publicly traded company, we’ll be helping you find your next play. In terms of everything else, it should be business as usual. We have the same mission and vision; we have the same culture and values; and I’m still the CEO of LinkedIn.
I wanted to conclude on a familiar note. One of the most memorable moments I’ve experienced at LinkedIn was ringing the bell at the NYSE. I remember the All Hands we had following the event like it was yesterday. During that meeting, we reinforced the fact that becoming public was not the end game, but rather a stepping stone in the process of our ultimate objectives. We finished the All Hands with two words that have become LinkedIn’s unofficial mantra: “Next play.” In other words, don’t dwell on the past, lingering for too long on a lesson learned, or the celebration of a special accomplishment, but rather focus on the task at hand. It’s a mantra that’s served us well.
So, here’s to the next stepping stone.