How Satya Nadella’s acquisition of LinkedIn changed the game for Microsoft

Reid Hoffman joins Microsoft's board of directors in a wave of change kicked in by Satya Nadella

By: Shweta Ganjoo |
March 15, 2017 5:49 pm

Months after Microsoft acquired LinkedIn for a whopping $26 billion, the company announced the appointment of LinkedIn co-founder Reid Hoffman to its board of directors, which includes also Microsoft founder Bill Gates and chairman John Thompson.

Hoffman joining Microsoft’s board of directors represents a strategic move by the company CEO Satya Nadella, who has been surfing against the tide in his efforts to turn around the fate of the organisation that once represented the core of the Silicon Valley. Nadella took over the reins of Microsoft in February 2014, six months after the organisation posted its first quarterly loss. But before Steve Ballmer vacated the seat that he had held for nearly 14 years, he finalised the deal acquiring Finnish telecom giant Nokia, which in turn turned out to be a monumental mistake as the company ended up incurring losses of nearly $8 billion.

When Nadella took over as the CEO, Microsoft was in a bad shape, to say the least. The Nokia debacle had not only cost the tech behemoth a whopping amount but the company also had to cut over 2,800 jobs and streamline its smartphone business. Declining business owing to its lack of innovation coupled with its closed door policy towards the startups and third-party developers in the Silicon Valley had earned Microsoft a lousy reputation.

Nadella filling in Ballmer’s shoes in the testing time was being witnessed as a brave move by the industry insiders and analysts. And three years down the line, he has not only managed to rebuilt Microsoft’s reputation in the global market but has also turned around the culture within the organisation.

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Hoffman, on the other hand, has enjoyed an angelic reputation in the Silicon Valley. He has not only funded a number of Silicon Valley startups including Flickr, Airbnb, Digg, shop kick, SixApart and Wikia, but also helped Facebook founder Mark Zuckerberg secure the first round of funding by PayPal co-founder Peter Thiel while kicking in $40,000 of his own. Former CEO of SurveyMonkey, Dave Goldberg even went on to say that Hoffman “is the person you want to talk to when you are starting a company.”

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At a time when Nadella is trying to turn around the fate of Microsoft, the company pitching Hoffman as its face (by bringing him on board) would not only instil the lost faith that the tech insiders once had in the company but also take forward the wave of change that Nadella has brought in the company.