In 2016, Microsoft Corp. made headlines when it acquired LinkedIn Corp. for more than US$26 billion.  It was the largest acquisition in company history. 

“I certainly think that the value of the two companies, combined, is greater than the two by themselves,” Microsoft co-founder Bill Gates told Bloomberg News in a television interview after the deal was announced.

Three years later, there are signs the bold move has paid off.

LinkedIn’s user base has grown by nearly 50 per cent since the deal was announced — from roughly 433 million users to more than 645 million.

Revenue has also been on the rise. In the fiscal year that recently ended, LinkedIn generated US$6.8 billion in revenue.  That’s a 28 per cent increase from the year before.

“Things have certainly exceeded our expectations.  We had a pretty aggressive plan in place and we’ve been able to outperform that plan,” LinkedIn CEO Jeff Weiner told Bloomberg News in a September television interview.

The driving force behind that outperformance is an improved product.  People are spending more time on LinkedIn because they are more engaged, whether it’s because of the content on the platform, messaging features, or more relevant connections to other professionals.

As users spend more time on LinkedIn, it creates more opportunities to generate revenue through higher advertising inventory, more subscriptions, and more user data, which helps improve its recruiter product.

“LinkedIn is continually creating new ways for members to connect,” Microsoft CEO Satya Nadella said on Microsoft’s fiscal fourth-quarter earnings call in July.

The momentum has helped justify the near 50 per cent premium Microsoft paid to beat out rivals such as Inc., Facebook Inc. and Google parent Alphabet Inc., all of which were reportedly interested in acquiring LinkedIn.

When the deal was unveiled, skeptics cited Microsoft’s challenges with previous acquisitions such as Nokia Corp. and questioned whether LinkedIn could thrive within the Microsoft empire.

"It's very difficult to keep the cultures separate," Douglas Melsheimer, a partner at investment banking firm Bulger Partners told Bloomberg News in 2016. "I can't think of an example of a large-scale acquisition like this where the acquired company really maintained any independence. Their fate is sealed, to a degree.”

Three years later, Microsoft’s willingness to allow LinkedIn to largely operate as an independent business has been cited as a key reason for the deal’s success.

“Satya and the leadership team at Microsoft have been incredibly supportive of that framework,” Weiner said. “The philosophy has always been the more we grow LinkedIn, the better it benefits Microsoft and so in that way, we are most definitely aligned.”

The economy has also played a key role in LinkedIn’s continued growth.  With the U.S. unemployment rate at its lowest level in 50 years, recruiters are constantly on the hunt for good talent.

Weiner refers to his role as a dream job, often highlighting LinkedIn’s vision statement to “create economic opportunity for every member of the global workforce.”  While the CEOs of acquired companies don’t always stick around, keeping him at the helm was a top priority for Nadella, who was keenly aware of Weiner’s popularity among staff.

And while LinkedIn has benefited from its independence, the two companies have worked closely on a range of initiatives, such as building LinkedIn into Outlook, more integration between LinkedIn Sales Navigator and Microsoft’s Dynamics 365, as well as moving LinkedIn to Microsoft’s Azure cloud.

From Weiner’s perspective, the moves made so far have only scratched the surface.

“You think about the fact that Microsoft’s products reach over a billion people on a global basis and you start to think about what’s possible.”