(MarketWatch) Microsoft Chief Executive Satya Nadella, appears to be following Microsoft\u2019s tradition of overpaying for acquisitions in purchase of LinkedIn. Microsoft Corp. has a dismal history of overpaying for huge acquisitions that don\u2019t work out, and Chief Executive Satya Nadella\u2019s first large purchase as chief executive doesn\u2019t appear to definitively break that trend.<\/p>\n
Microsoft MSFT, -2.60% announced a surprise $26.2 billion acquisition Monday of professional social network LinkedIn Corp. LNKD, +0.02% The move elicits memories of Microsoft attempting to buy Yahoo Inc. YHOO, +0.93% for more than $44 billion in 2008, after the dot-com boom came crashing down and the competitors that would eventually surpass the internet portal\u2014Alphabet Inc.\u2019s GOOG, -0.15% GOOGL, -0.18% Google and Facebook Inc. FB, +0.25% \u2014had started to rise. Now, Yahoo\u2019s core assets are up for sale and reportedly fetching bids around $5 billion.<\/p>\n
Similarly to Yahoo in 2008, other social-networking companies have surpassed their peak valuations in the minds of most investors, as long as they aren\u2019t named Facebook. LinkedIn seemed to reach its peak last year, before a massive fall in February stemming from a confusing earnings report and explanation. Microsoft is paying a whopping 50% premium for LinkedIn, but by some accounts it could be seen as swooping in while LinkedIn is down, thanks to continued concerns about slowing growth.<\/p>\n