Daily Management Review

Google and LinkedIn to swap headquarters


07/13/2016


Google has reached an agreement with the business social networking site LinkedIn on the exchange headquarters in the Californian city of Mountain View. It is reported by Silicon Valley Business Journal.



Shawn Collins
Shawn Collins
Under the terms of the cash-strapped deal, Google receives all the territory now belonging to LinkedIn, including the social network’s head office of about 35 thousand square meters and more than three hectares of land. In turn, LinkedIn will move to Google’s four office buildings (with a total of about 70 thousand square meters).

Through the deal, Google will have enough space for construction of the new campus. The publication notes that LinkedIn had already received permission of the city authorities for construction of office space on the territory of 130 thousand square meters. 

Google announced its plans to expand and update the headquarters in February 2015. The company, however, did not specify how much exactly it intends to spend on the project.

On Monday, June 13, Microsoft announced acquisition of the professional social network LinkedIn for $ 26.2 billion. The news sparked discussion in the technology community and media. True reasons, as well as significance of the transaction appear to be non-obvious: why LinkedIn has agreed the deal when in the past, the service’s head Jeff Weiner has repeatedly stated his desire to maintain independence? Why does Microsoft need a company, which is considered Facebook’s "dull cousin", and which shares have lost 48% of the cost for the last seven months? Finally, why so pricey? Not that the deal is one of the largest in the technology industry after the dot-com era.

According to Microsoft’s Satya Nadella, acquisition of the business contacts’ social network will allow his company to "empower" and attract new users. It is assumed that the professional product Microsoft Office will make a perfect match with the network for professionals. What lies behind the typical words of the press release? As Vox notes, both LinkedIn and Microsoft have long ceased to be "cool". Today, both companies rather fall into the category of "boring", and both are called "dull cousins" of the more popular Apple, Google and Facebook.

However, LinkedIn’s acquisition will consolidate changes in Microsoft's strategy. These alterations, by the way, have escaped attention of many. Today, the corporation is no longer seeking to sell software for computers, but wants to sell technological services to business customers instead. The professional social network fits in this strategy perfectly. This will giant not only help to attract new users, but also to strengthen relationships with already existing. 

Although LinkedIn’s audience (433 million users) is not as wide as in Facebook, or Twitter, or Instagram, it is consists of people who make money. Companies are willing to pay - and pay well - for finding the best employees, and it just so happened that LinkedIn has become a place where they can be found. Tools to find personnel for service business brought nearly two-thirds of its revenue last year.

source: bizjournals.com






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