The deal is the largest under the tenure of Microsoft CEO Satya Nadella, who has been reshaping Microsoft since taking over in 2014 to appeal more to business customers with cloud-based services and productivity tools. LinkedIn isn’t an obvious fit in the ongoing restructuring, but gives Microsoft the biggest global social network for professional that’s used by job seekers, recruiters and human resources teams. In a statement, Nadella said the acquisition could drive growth for LinkedIn as well as Microsoft’s Office 365 and Dynamics services.

“Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn’s network, now gives us a chance to also change the way the world works,” Weiner said in the statement.

Eoin Treacy's view

It is very questionable whether Microsoft will get their money back following such a large outlay on a company like LinkedIn and the valuations on the sector generally are not exactly cheap. With the notable exception of Facebook social media/new economy services companies have been underperforming for quite some time. Today’s announcement of a major takeover in the sector has the potential to revitalise perceptions subject to sound fundamentals. 

Twitter’s downtrend has lost momentum in the region of the February lows. A sustained move above $18 would be required to break the medium-term progression of lower rally highs and signal a return to demand dominance beyond short-term steadying. 

Yelp has rallied over the last couple of months to push back above the trend mean for the first time since 2015. While some consolidation of that gain is now looking likely, a sustained move below $20 would be required to confirm more than temporary resistance in this area. 

Tripadvisor has also encountered resistance in the region of the trend mean and will need to hold the progression of higher reaction lows, currently near $60, if potential for higher to lateral ranging is to be given the benefit of the doubt.