Why did Microsoft pay such a premium? According to its CEO Satya Nadella, LinkedIn was seen as a key piece of maintaining growth for the company. Nadella noted in a press release, “Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet,” Nadella noted in a press release following the acquisition.
What this means for UpWork
It appears Microsoft may be viewing UpWork in the same vein as it once viewed LinkedIn: an upstart tech company with resources which could provide benefits to Microsoft in the future. Additionally, like LinkedIn, UpWork has seen its share price fall quickly over the past year, making its current valuation more appealing for a potential acquisition. This may be one of the main reasons why so many analysts have a buy recommendation on UPWK and believe in its long-term potential given its current valuation.
There is no guarantee that Microsoft will swoop in with an offer. However, having one tech giant watching over the company may attract even more suitors, like Google or Salesforce, down the line. This puts UpWork in a great position to provide its shareholders with significant future returns.
