Buying LinkedIn makes good sense for Microsoft too. It represents one of the most significant steps in Nadella’s effort to reinvent Microsoft from the leading PC software maker to a company that sells business technology services more generally.
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And while LinkedIn’s audience isn't as big as mainstream social networks like Facebook, Twitter, or Instagram, it's a highly lucrative audience. Companies are willing to spend considerable sums of money to find the best employees, and LinkedIn effectively has the world’s largest Rolodex of skilled professionals. LinkedIn's "talent solutions" business — charging businesses to post job ads and provide other recruiting services — accounted for almost two-thirds of LinkedIn’s $3 billion in revenue.
LinkedIn also makes money selling premium subscriptions to LinkedIn users and helping users in sales occupations find other users who may be interested in buying their products.
And depending on how you measure it, LinkedIn is already profitable. According to generally accepted accounting principles, LinkedIn took a modest $46 million loss in the most recent quarter. But like many technology companies, LinkedIn prefers an alternative method of computing profits that excludes the value of employees’ stock-based compensation. This measure shows the company earning a hefty $99 million in profits.
Source:http://www.vox.com/2016/6/13/11920856/linkedin-microsoft-deal-explained
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