LinkedIn Buys Search, CRM Companies

LinkedIn will pay somewhere around $13.4 million in stock for two companies it acquired this month, according to a filing with the SEC.

The exact price it’s paying for search provider IndexTank and contact management software maker Connected wasn’t announced. However, the filing with the Securities Exchange Commission said LinkedIn would issue up to 162,928 shares as at least partial payment. At LinkedIn’s closing price today of $82.36, the stock portion of the deal is potentially worth $13.4 million. The actual number of shares to be issued could be less based on certain provisions in the sale agreements.

The acquisitions are LinkedIn’s fifth and sixth in just over a year, and the first since the company went public in May.

Buying a CRM firm like Connected isn’t hard to understand, considering building, managing, and maintaining — and locating — contacts is LinkedIn’s business.

The for-fee service, which launched publicly in February, manages 11 million contacts, connecting with all the largest social and business networks, as well as personal address books such as Outlook. Now, say the founders in a post on the site, Connected will be free while it’s integrated into the LinkedIn network. What that will mean for LinkedIn users isn’t detailed.

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IndexTank, on the other hand, seems a less-obvious acquisition target, as its founder and CEO Diego Basch notes in a lengthy blog post. “At first glance LinkedIn may not appear as the most obvious fit,” he writes, going on to suggest that mobile searching through LinkedIn’s growing contact base, business profiles, and its burgeoning content library factored into the thinking.

A different take on the search acquisition is offered in a BNET blog post which offers two reasons for buying IndexTank: Because LinkedIn needs a “personal organizer” and the current search it offers isn’t adequate, and because it has the money to buy what it wants.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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