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Did Microsoft Make the LinkedIn Offer to Thwart Salesforce’s Bid?

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Salesforce also bids for LinkedIn

Microsoft (MSFT) made news in the technology space when it announced the acquisition of LinkedIn (LNKD). Also, Symantec (SYMC) has made its largest acquisition in more than a decade. Furthermore, in early June, Salesforce (CRM) announced its acquisition of Demandware, its largest acquisition to date.

Recently, Bloomberg shared that before Microsoft made an offer of $26.2 billion for LinkedIn, Salesforce had submitted a bid for the company.

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Increased competition in the cloud space

Both Microsoft and Salesforce want a bigger share of the cloud space. Amazon is the undisputed leader of the cloud space. According to Jefferies, an investment research firm, Salesforce partners have identified Amazon as the “3rd biggest threat to Salesforce,” after Microsoft (MSFT) and Oracle (ORCL). Salesforce leads the global CRM (customer relationship management) space, with an ~18% market share, as stated by Gartner.

Acquiring LinkedIn would have provided Salesforce with a vast amount of data on users all around the world. This would have helped Salesforce develop tools and enabled customers to finalize sales deals. Users’ profiles on LinkedIn provide an insight into a range of information, including users’ skills, responsibilities in previous jobs, and contact details.

Investors who wish to gain exposure to Salesforce could consider investing in the SPDR S&P 500 ETF (SPY). SPY has a ~29% exposure to application software. It invests ~0.23% of its holdings in Salesforce.

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