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Microsoft Pays $26 Billion for LinkedIn

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Microsoft

Microsoft Corp. is acquiring the professional social network LinkedIn Corp. for $26.2 billion, one of the largest technology-industry deals on record, as the maker of Windows software attempts to put itself at the center of people’s business lives.

The deal is a way for Microsoft, which largely missed out on the consumer Web boom dominated by the likes of Google and Facebook Inc., to sprint ahead in social tools -– in this case, for professionals. While Chief Executive Officer Satya Nadella has drawn kudos for efforts to reshape the company and reignite sales growth, the board is urging an even faster shift toward software and services delivered over the Internet.

Microsoft will pay $196 per share in an all-cash transaction, inclusive of LinkedIn’s net cash, a 49.5 percent premium to LinkedIn’s closing price Friday. LinkedIn will retain its brand, culture and independence and Jeff Weiner will remain chief executive officer of the company, Microsoft said in a statement Monday. The deal is the most expensive relative to earnings of any takeover valued at more than $5 billion this year, according to data compiled by Bloomberg.

“This is about the coming together of the leading professional cloud and the leading professional network,” Nadella said in an interview. “This is the logical next step to take. We believe we can accelerate that by making LinkedIn the social fabric for all of Office.”

The deal is the biggest ever for Microsoft as Nadella, 48, focuses on appealing to business customers with cloud-based services and productivity tools rather than regular customers. In a presentation announcing the deal, Redmond, Washington-based Microsoft outlined a vision in which a person’s LinkedIn profile resides at the middle of other pieces of their work life, connecting with Windows, Outlook, Excel, PowerPoint, Skype and other Microsoft products.

Microsoft’s digital assistant Cortana could provide users with information pulled from LinkedIn about participants in an upcoming meeting, for example, while a LinkedIn newsfeed will serve up articles based on projects that users are working on. Other products could include a kind of consulting service that will suggest an “expert” who might be able to help with a given project.

Microsoft could build LinkedIn, the largest global professional network, into a major customer relationship management software system for salespeople, pushing into an area dominated by Salesforce.com Inc., said Anurag Rana, a senior analyst for Bloomberg Intelligence.

“LinkedIn could really become a really big competitor for Salesforce going forward,” he said.

LinkedIn shares surged 47 percent to $192.56 at 11:35 a.m. in New York, their biggest intraday advance since 2011. They had declined 42 percent this year through Friday as investors began to question the company’s long-term prospects. Microsoft fell 2.1 percent to $50.40. Twitter Inc. jumped as much as 9.1 percent amid speculation that it could be in play as well.

The $26.2 billion offer values LinkedIn at about 91 times earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg. Excluding net cash, the multiple is about 84 times Ebitda.

LinkedIn has long been valued for having the potential viral growth of a social network with the recurring revenues of a software-as-a-service business. But recently, growth has started to slow and it’s been more difficult to get people to return to the site and pay for services. The company has been rethinking its strategy, redesigning its suite of mobile applications to make the product easier to use. Combining with Microsoft would give LinkedIn a boost in members with reasons to visit, making it more useful if people are sharing updates more frequently.

Microsoft started talking with LinkedIn about a possible deal in January, Nadella said. That’s right before LinkedIn reported a lower-than-expected revenue forecast that caused its stock to fall more than 40 percent in a day. The talks got serious once Nadella mentioned his vision for the structure, telling Weiner that LinkedIn could continue to operate independently, like Facebook’s WhatsApp or Google’s YouTube, Weiner said.

“In that very first meeting, we both got excited as we were brainstorming and riffing a bit about the things we could do in combination, combining the world’s professional network and the world’s professional cloud,” Weiner said in an interview Monday.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Social Media

Twitter Legalize Giveaway, Introduces Tip Jar, A Feature Allowing Users to Send and Recieve Money

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Twitter on Thursday introduced Tip Jar, a new feature that makes it easy for users to send money to their favorite creators on the micro-blogging service.

“This is a first step in our work to create new ways for people to receive and show support on Twitter — with money,” the company said in a blog post.

Users will be able to connect their Twitter accounts with Tip Jar to Bandcamp, Cash App, Patreon, PayPal, or Venmo. Twitter will take no cut of money sent through the feature.

According to the company’s statement in a blog post, You’ll know an account’s Tip Jar is enabled if you see a Tip Jar icon next to the Follow button on their profile page. Tap the icon, and you’ll see a list of payment services or platforms that the account has enabled. Select whichever payment service or platform you prefer and you’ll be taken off Twitter to the selected app where you can show your support in the amount you choose. The services* you can add today include Bandcamp, Cash App, Patreon, PayPal and Venmo. Twitter takes no cut. On Android, tips can also be sent within Spaces.

Those who use Twitter in English on iOS and Android will be able to start sending money through Tip Jar on Thursday. Certain users will be able to add Tip Jar to their profiles to begin collecting tips. This includes creators, journalists, experts and nonprofits, Twitter said.

The new feature comes as part of a broader effort by the company to build more features at a faster clip in a push to grow Twitter’s user base to 315 million daily active users by the end of 2023. Earlier this week, the company also announced the launch of Spaces, a feature that allows users to join virtual rooms where they can engage in real-time audio conversations with others.

Tip Jar comes after a rough week for Twitter, which has seen its stock fall more than 17 percent since April 29, when the company reported its first-quarter earnings. In the report, the company missed on analysts’ user growth expectations and the company provided lower revenue guidance for the second quarter than expected.

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Uber To Introduce Uber Connect and Uber Hourly Service In Nigeria

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Uber

Uber, a ride-hailing giant, has said it is introducing two new services for the Nigerian market. The ride-hailing company, which also offers freight, courier and other transport services, said the two services, ‘Uber Connect’ and ‘Uber Hourly’, will be available for Nigeria customers in the next few months.

The company’s country manager, Tope Akinwumi, speaking about the new services, noted that the initiative emanated from the desire to bring innovativeness in solving the transportation needs of people.

Uber’s representative, further said: “We want to bring innovations designed to help people get anywhere and get anything as cities start to move again,” Tope Akinwumi, Uber’s country manager, said in an emailed statement on Tuesday.

“As we want to show our commitment to improving the lives of Nigerians, and more importantly, unlocking access to earning opportunities for drivers, we believe this announcement is a step in the right direction.”

Uber Hourly, which is already operating in several cities around the world, is an alternative to on-demand, point-to-point trips that will provide riders added convenience with no need to re-book their ride.

The Hourly will enable riders to book rides by the hour, providing them with a single driver for their entire journeys especially for riders who may need extra time to complete tasks, also availing drivers the opportunity to make more money.

“Hourly already launched in several cities around the world including Dar es Salaam and based on those insights and the warm reception from both riders and drivers, we’re excited to bring this to Nigeria.

“We built this feature for those moments when you anticipate you’ll need extra time getting things done, and so drivers can access a meaningful earnings opportunity while “locking in” an upfront time frame for the service provided,” Akinwumi said.

Uber Connect leverages Uber’s logistics technology and network to provide people with a quick and affordable way to send packages to friends and family using the Uber app.

Akinwumi explains, “The agility of our platform allows us to quickly adapt our products to meet the evolving needs of communities impacted by the health crisis while experimenting with new revenue streams and earning opportunities for drivers.”

Uber Connect is already available in Ghana, South Africa and Kenya, including other countries across the globe.

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Paystack Expands Operation After Acquisition, Enters South Africa

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Paystack - Investors King

Paystack, one of the leading Nigerian fintech Startups, has expanded operations to South Africa just seven months after Stripe acquisition.

The startup acquired for over $200 million in October 2020, announced its official launch in South Africa on Thursday to increase its operating markets to three, including Nigeria and Ghana.

The South African launch was preceded by a six-month pilot, which means the project kickstarted a month after Stripe acquired it. Stripe is gearing toward a hotly anticipated IPO and has been aggressively expanding to other markets. Before acquiring Paystack, the company added 17 countries to its platform in 18 months, but none from Africa. Paystack was its meal ticket to the African online commerce market, and CEO Patrick Collison didn’t mince words when talking about the acquisition in October.

There is an enormous opportunity. In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050,” he said.

Although Stripe said the $600 million it raised in Series H this March would be used mainly for European expansion, its foray deeper into Africa has kicked off. And while Paystack claims to have had a clear expansion roadmap prior to the acquisition, its relationship with Stripe is accelerating the realization of that pan-African expansion goal.

Now, Africa accounts for three of the 42 countries where Stripe currently has customers today.

“South Africa is one of the continent’s most important markets, and our launch here is a significant milestone in our mission to accelerate commerce across Africa,” said Paystack CEO Shola Akinlade of the expansion. “We’re excited to continue building the financial infrastructure that empowers ambitious businesses in Africa, helps them scale and connects them to global markets.”

The six-month pilot saw Paystack work with different businesses and grow a local team to handle on-the-ground operations. However, unlike Nigeria and Ghana, where Paystack has managed to be a top player, what are the company’s prospects in the South African market where it will face stiff competition from the likes of Yoco and DPO?

The opportunity for innovation in the South African payment space is far from saturated. Today, for instance, digital payments make up less than half of all transactions in the country,” Abdulrahman Jogbojogbo, product marketer at Paystack said. “So, the presence of competition is not only welcome; it’s encouraged. The more innovative plays there are, the faster it’ll be to realize our goal of having an integrated African market.”

Khadijah Abu, head of product expansion, added that “for many businesses in South Africa, we know that accepting payments online can be cumbersome. Our pilot in South Africa was hyperfocused on removing barriers to entry, eliminating tedious paperwork, providing world-class API documentation to developers, and making it a lot simpler for businesses to accept payments online.”

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