In an interview with CNBC, LinkedIn Corp. (LNKD) co-founder Konstantin Guericke said that Microsoft Corporation (MSFT) had approached his firm as far back as 2006 about a possible takeover of the business social media giant.
LinkedIn also received interest from Alphabet Inc. (GOOG) subsidiary Google and Monster Worldwide (MWW), a firm that once dominated the online recruitment industry but has largely faded. (See also: EU Set to Approve Microsoft, LinkedIn Deal.)
Microsoft is days away from receiving formal approval from the European Commission to complete a $26.2 billion takeover of LinkedIn, which went public in 2011.
Guericke suggested that a deal didn't make sense for either party at the time. On the one hand, Guericke and other co-founders expected LinkedIn to keep growing and exploiting new opportunities. On the other side, Microsoft wasn't likely going to pay a premium for what was already high valuation due to that expected growth.
During the CNBC interview, Geuricke said that LinkedIn officials had a high valuation in mind for his company. His team expected that LinkedIn would evolve in the years ahead. That high premium failed to justify a takeover by Microsoft or a sale by LinkedIn at the time.
During the interview, Guericke expressed disappointment that Microsoft was buying the company but said that the deal "makes sense." However, he also said that Microsoft must allow LinkedIn's management team to make independent decisions.
In November, Microsoft offered concessions to the European Commission to receive permission to complete the deal. Among those concessions, Microsoft will allow other professional social networks to maintain access to its Outlook program. The company will also allow hardware manufacturers like Dell and Hewlett-Packard Enterprise (HPE) to disable LinkedIn shortcuts on personal computers and other devices. Following these concessions and several small tweaks to the agreement, the commission approved the deal Dec. 6. Microsoft paid $196 for shares of LinkedIn in the deal. (See also: Microsoft Makes LinkedIn Concessions.)
The deal is the largest in Microsoft’s history, dwarfing the $7.2 billion the software giant paid for Nokia in 2014. The Nokia deal is considered one of the worst deals in the company’s history and resulted in massive layoffs and a write-off valued at more than $8 billion. (See also: LinkedIn Will Not Be the Next Nokia for Microsoft.)