Microsoft is making a massive bet on professional social networking: It has reached an agreement to buy LinkedIn for $26.2 billion, in what would be one of the largest tech industry deals in history.
Viewed one way, the deal is effectively a bet on a new kind of professional workplace, where Microsoft's Office 365 and other "productivity and business processes" products merge with the largest professional social network.
"In essence, we can reinvent ways to make professionals more productive while at the same time reinventing selling, marketing and talent management business processes," Microsoft CEO Satya Nadella said in a memo to employees.
"This combination will make it possible for new experiences such as a LinkedIn newsfeed that serves up articles based on the project you are working on and Office suggesting an expert to connect with via LinkedIn to help with a task you're trying to complete," Nadella wrote.
LinkedIn CEO Jeff Weiner echoed that idea, saying the deal will help the company continue to "connect professionals to make them more productive and successful." The company says it has more than 433 million subscribers and 105 million unique visiting members a month.
Microsoft has agreed to pay $196 per share to acquire the professional networking service, which adds up to $26.2 billion — or to put it in terms runners will understand, roughly $1 billion for each mile of a marathon.
The companies say that both of their boards of directors have unanimously approved the deal, and that it's slated to close this year. LinkedIn will remain an independent brand, with Weiner as CEO.
Microsoft says it will finance the deal primarily by issuing new debt.
Microsoft's previous large acquisitions were a mixed bag of success. The company spent $8.5 billion to buy Skype in 2011, which has become an integral part of its offerings. Microsoft's $7.2 billion acquisition of Nokia's phone assets has been an expensive flop. Both deals happened under previous CEO Steve Ballmer.
LinkedIn's most recent deal was an acquisition of an online learning company, Lynda, for $1.5 billion.
NPR's Aarti Shahani contributed to this report.