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June 17, 2016

Salesforce revealed to have also made a bid for LinkedIn

News: Price paid by Microsoft to buy Linkedin is nearly half of the market capitalisation of Salesforce.

By CBR Staff Writer

Salesforce reportedly failed to win the bid to acquire LinkedIn, with the bid beaten by technology giant Microsoft for $26.2bn earlier this week.

UBS Group analyst Brent Thill was quoted by The Wall Street Journal as saying that the deal would have been a boost for Salesforce. The offer price made by Salesforce to acquire the professional social network site has not been disclosed.

The price paid by Microsoft to buy Linkedin is nearly half of the $55.9bn market capitalisation of Salesforce.

Thill said: "There are few deals in tech where the acquired company is 50% of the market cap."

Microsoft’s acquisition of LinkedIn was an all-cash transaction. As of 31 March 2016, the software major had about $106bn in cash and short-term investments, whereas Salesforce held $2bn in cash and short-term investments as of the end of April.

Goldman Sachs was the advisor to Salesforce in its bid to purchase LinkedIn, according to Bloomberg.

Salesforce competes with Microsoft in offering cloud-based software and services to businesses and the successful deal would have given the company a huge database of workers across the world to improve its web-based offerings that assist its customers to clinch sales deals.

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LinkedIn, which gives access to profiles of its 434 million members, helps sales persons to identify potential customers by providing hints of a corporate organizational structure.

The combination of Microsoft and LinkedIn is expected to pose increased competition to Salesforce in the $26.3bn customer relationship management software market.

According to the market research firm Gartner, the market is currently dominated by Salesforce.com with a 19.7% share compared to Microsoft’s 4.3%.

Earlier this month, Salesforce agreed to buy Demandware, a US-based provider of enterprise cloud commerce solutions, for $2.8bn.

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