WHEN: Today, Monday, June 13th
WHERE: CNBC's "Squawk Alley"
Following is the unofficial transcript of a FIRST ON CNBC interview with Microsoft CEO Satya Nadella and LinkedIn CEO Jeff Weiner on CNBC's "Squawk Alley" (M-F, 11AM-12PM ET) today, Monday, June 13th after their announcement this morning. Following is a link to the video on CNBC.com:http://video.cnbc.com/gallery/?video=3000525429.
All references must be sourced to CNBC.
CARL QUINTANILLA: WELCOME TO "SQUAWK ALLEY." OF COURSE, MICROSOFT, LINKEDIN THE BIG STORY OF THE DAY. LET'S GET STRAIGHT TO JON FORTT WITH THE NEWS OF THE MORNING. JON?
JON FORTT: LET'S GET STRAIGHT TO SATYA NADELLA THE CEO OF MICROSOFT AND JEFF WEINER THE CEO OF LINKEDIN, A MEGADEAL THEY'VE ANNOUNCED THIS MORNING. $26.2 BILLION. MICROSOFT LOOKING TO ACQUIRE LINKEDIN OF COURSE THAT IS APPROVED BY REID HOFFMAN WHO CONTROLS SHARES OF THAT COMPANY. SATYA I WANT TO START WITH YOU, CONGRATULATIONS FIRST ON THIS DEAL. I KNOW YOU HAVE SOME THINGS PROBABLY YOU WANT TO SAY ABOUT THIS DEAL OFF THE TOP BUT WHEN YOU APPROACHED LINKEDIN WITH THIS DEAL AND WHY BUY VERSUS PARTNER WITH THIS COMPANY IF IT'S GOING TO BE RUN AS ITS OWN ENTITY WITHIN MICROSOFT?
SATYA NADELLA: THANK YOU, JON. THIS DEAL IS ALL ABOUT BRINGING TOGETHER THE WORLD'S LEADING PROFESSIONAL CLOUD AND THE WORLD'S LEADING PROFESSIONAL NETWORK. IF YOU THINK ABOUT HOW PEOPLE WORK TODAY, IT'S SPLIT BETWEEN THESE TWO WORLDS. THEY ARE USING OFFICE ON A DAILY BASIS, THEY ARE USING SYSTEMS LIKE DYNAMICS FOR THEIR CRM AND HUMAN CAPITAL MANAGEMENT AND THEN OF COURSE, THEY ARE USING THE PROFESSIONAL NETWORK. THE DREAM THAT I HAVE ALWAYS HAD IS HOW DO WE MAKE THIS COME TOGETHER SO THAT WE CAN SERVE OUR CUSTOMERS SO WHEN I THINK ABOUT REINVENTING PRODUCTIVITY IN BUSINESS PROCESS THIS IS REALLY ABOUT COMPLETING THAT SCENARIO AND REID, JEFF AND I HAVE KNOWN EACH OTHER FOR AWHILE. WE HAVE BEEN TALKING ABOUT THESE THINGS TOGETHER FOR AWHILE BUT TO ME, THIS IS ABOUT THE NEXT PHASE OF GROWTH FOR MICROSOFT. OF COURSE WE CAN DO THINGS COMMERCIALLY IN TERMS OF INTEGRATION BUT WHEN I THINK ABOUT THE OPPORTUNITY AHEAD AROUND PRODUCTIVITY, BUSINESS PROCESS AND THE PROFESSIONAL NETWORK, IT'S A TREMENDOUS OPPORTUNITY TO EXPAND OUR ABILITY TO GROW.
FORTT: SO SATYA AGAIN, WHEN EXACTLY ABOUT DID THIS PHASE OF THE CONVERSATION BEGIN AND TELL ME WHAT YOU SEE AS THE CROWN JEWEL, THE CORE ASSET THAT LINKEDIN HAS THAT'S GOING TO REALLY ENABLE THAT REINVENTION OF PRODUCTIVITY THAT YOU HAVE TALKED SO MUCH ABOUT.
NADELLA: I WOULD SAY WE STARTED IN EARNEST IN FEBRUARY TALKING ABOUT SOME OF THE DEEP SCENARIOS. LINKEDIN BY ITSELF IS A MULTI-SIDED MARKET. THERE'S LINKEDIN MEMBERSHIP AND THE LINKEDIN MEMBER ALONG WITH THE OFFICE 365 USAGE BECAUSE THESE PROFESSIONALS ARE USING OFFICE 365 ON ONE SIDE AND LINKEDIN ON THE OTHER SIDE. THAT'S ONE MASSIVE OPPORTUNITY FOR US TO INCREASE ENGAGEMENT ON BOTH. THINK ABOUT THE OTHER SIDE OF LINKEDIN. IT IS ABOUT HIGHER MARKET SELL AND LEARN. THAT'S ALL BUSINESS PROCESS. THAT'S A HUGE OPPORTUNITY FOR US TO INTEGRATE AND EXPAND INTO BUSINESS PROCESSES WITH DYNAMICS. SO THOSE ARE THE TWO SIDES THAT ARE BOTH CROWN JEWELS OF LINKEDIN BUT REALLY, IT'S ABOUT PUTTING THEM TOGETHER WITH THE CROWN JEWELS OF MICROSOFT. THAT IS OFFICE 365 AND OUR CLOUD. THAT'S WHAT'S SORT OF SUPER EXCITING. WE STARTED TALKING ABOUT IT IN FEBRUARY. SINCE THEN, THINGS HAVE PICKED UP PACE.
QUINTANILLA: JEFF, OBVIOUSLY WE REMEMBER TALKING TO YOU AFTER THAT JANUARY OR FEBRUARY EARNINGS CALL AND YOU ARE SELLING FOR WHERE THE SHARES WERE JUST BEFORE THAT. HOW DO YOU FEEL ABOUT PRICE AND WHAT DOES IT SAY ABOUT THE U-TURN THAT WE HAVE MADE IN THE SHARES SINCE THAT TIME?
JEFF WEINER: YEAH. FOR US, IT'S ALWAYS BEEN ABOUT THE REALIZATION OF OUR LONG-TERM OBJECTIVES, MISSION AND VISION. THIS COMBINATION VERY MEANINGFULLY ACCELERATES OUR ABILITY TO REALIZE THOSE GOALS. IT ALSO TAKES OUR SCALE TO A COMPLETELY DIFFERENT LEVEL. YOU LOOK AT MICROSOFT'S FOOTPRINT ACROSS OVER A BILLION CUSTOMERS AND THE OPPORTUNITY TO SEAMLESSLY INTEGRATE OUR NETWORK WITHIN THE MICROSOFT CLOUD TO CREATE A SOCIAL FABRIC, IF YOU WILL, THAT CAN BE SEAMLESSLY INTEGRATED INTO AREAS LIKE OUTLOOK, CALENDAR, OFFICE, WINDOWS, SKYPE, DYNAMICS, ACTIVE DIRECTORY, FOR US, THAT WAS AN INCREDIBLY EXCITING OPPORTUNITY.
KAYLA TAUSCHE: JEFF, YOU WRITE IN YOUR LETTER TO EMPLOYEES ABOUT THE INTENSIFYING COMPETITION FROM LARGE CAP TECH COMPANIES ABOUT WANTING TO BE PART OF ONE OF THOSE INSTEAD OF GOING UP AGAINST ONE OF THOSE. I'M WONDERING WHAT BENEFITS YOU THINK THE SCALE OF MICROSOFT WILL GIVE YOU, CONSIDERING THAT YOU WILL STILL BE A RELATIVELY STAND-ALONE COMPANY AND WHETHER YOU THINK OTHER COMPANIES FACED WITH THE SAME THREAT OF COMPETITION SHOULD MAKE THE DECISION YOU MADE.
WEINER: YEAH, YOU KNOW, IT DATES BACK TO THE THIRD QUARTER OF LAST YEAR. THERE WAS A CLEAR PATTERN THAT EMERGED FOLLOWING THE EARNINGS REPORTS FROM THE TECH TITANS, IF YOU WILL. YOU LOOK AT GOOGLE, APPLE, MICROSOFT, AMAZON AND FACEBOOK, AND WITHIN THE SPAN OF A FEW DAYS AFTER THEIR EARNINGS REPORTS, COLLECTIVELY THOSE COMPANIES INCREASED THEIR MARKET CAPITALIZATIONS BY SOMEWHERE ON THE ORDER OF $100 BILLION. IT USED TO BE THE SCALE WAS HUNDREDS OF MILLIONS OF USERS AND BILLIONS OF DOLLARS OF MARKET CAP. TODAY IT'S BILLIONS OF USERS OR CUSTOMERS AND HUNDREDS OF BILLIONS OF DOLLARS OF MARKET CAP. THE COMBINATION OF OUR TWO COMPANIES, HAVING MICROSOFT BEHIND US, ENABLES US TO REALIZE THE THINGS THAT WE ALWAYS DREAMT OF DOING. SO WE ARE EXCITED ABOUT IT.
FORTT: JEFF, I'M NOT IGNORING YOU. IT'S JUST THE WAY THESE QUESTIONS ARE FLOWING, I HAVEN'T GOTTEN A CHANCE TO ASK YOU ONE YET. BACK TO SATYA, TALK TO ME ABOUT LINKEDIN WITHIN THE BUSINESS MODEL FOR CLOUD. WITHIN AZURE, HOW IS HAVING LINKEDIN, ITS DATA, ITS TRAFFIC, ITS REVENUE, GOING TO HELP THE AZURE BUSINESS AND ALSO, WITHIN OFFICE 365. YOU TOUCHED A LITTLE BIT ON THAT, BUT THERE ARE A LOT OF POTENTIAL CONNECTIONS WITH LINKEDIN THAT COULD HELP THE 365 EXPERIENCE. FROM SOFTWARE AS A SERVICE AND PLATFORM AS A SERVICE, BUSINESS MODEL PERSPECTIVE, TALK ABOUT WHAT LINKEDIN IDEALLY IS GOING TO BRING TO YOU.
NADELLA: ABSOLUTELY, JON. WHEN I THINK ABOUT MICROSOFT CLOUD, IT'S REALLY ABOUT THREE CLOUDS – IT'S AZURE, IT'S DYNAMIC, IT'S OFFICE 365. AND REALLY, LINKEDIN HELPS US IN ALL FRONTS. AND IN FACT, LINKEDIN BY ITSELF IS NOW A NEW CLOUD THAT'S GOING TO BE PART OF OUR MICROSOFT CLOUD AND THAT THE GROWTH THERE ITSELF WILL ALSO HELP US. THE SCENARIOS ARE VERY STRAIGHTFORWARD. THE RICHNESS OF THE PROFESSIONAL GRAPH THAT LINKEDIN REPRESENTS AND THE ENTERPRISE GRAPH THAT WE REPRESENT, WHICH IS – IF YOU THINK ABOUT WHAT'S UNDERNEATH OFFICE 365, UNDERNEATH DYNAMICS – IS THE INFORMATION, PEOPLE, THE RELATIONSHIPS WITH OTHER PEOPLE, THEIR CALENDARS, THEIR SCHEDULE. BRING THAT TOGETHER WITH THE PROFESSIONAL NETWORK, SKILLS, JOB HISTORY, OTHER PEOPLE YOU ARE CONNECTED TO IN YOUR PROFESSION. AND THEN THINK ABOUT EVEN A SIMPLE THING. YOU ARE WALKING INTO A MEETING WITH A BUNCH OF PEOPLE THAT YOU ARE MEETING FOR THE FIRST TIME, CORTANA WAKES UP, WHICH IS YOUR PERSONAL DIGITAL ASSISTANT, AND TELLS YOU ABOUT THE PEOPLE AND THE CONNECTIONS YOU HAVE WITH THEM THROUGH YOUR PROFESSIONAL NETWORK. THAT'S THE TYPE OF SCENARIOS IN OFFICE 365. TAKE DYNAMICS. SOCIAL SELLING IN LINKEDIN INTEGRATED WITH DYNAMICS, TRANSFORM CRM. HUMAN CAPITAL MANAGEMENT BETWEEN DYNAMICS AND THE TALENT MANAGEMENT SYSTEMS AND SOLUTIONS THAT LINKEDIN HAS. LEARNING, WHICH I'M SO EXCITED ABOUT WHAT WE CAN DO BETWEEN THE LEARNING SOLUTIONS THAT LINKEDIN HAS AND ALL OF OFFICE 365 IN EVERY DAY USAGE. SO, PLENTY OF SCENARIOS ACROSS THE BOARD.
WEINER: AND JON, YOU CAN ACTUALLY THINK ABOUT THIS MARRIAGE OF MICROSOFT'S CORPORATE GRAPH AND LINKEDIN'S PROFESSIONAL GRAPH AS A HUGE LEAP FORWARD FOR THE ECONOMIC GRAPH VISION DIGITALLY MAPPING THE GLOBAL ECONOMY. AND YOU COULD IMAGINE A DAY WHERE THERE'S THE ECONOMIC GRAPH AS A SERVICE.
NADELLA: YEAH. AND THAT WILL BE THE DEVELOPER SERVICE. THAT WILL BE THE AZURE CONNECTION.
FORTT: GREAT. AND JEFF – THAT IS POTENTIALLY VERY INTERESTING. AND JEFF, DOES THIS TEAMING UP, THIS ACQUISITION OF LINKEDIN, GIVE YOU MORE HEADROOM TO INVEST AGGRESSIVELY IN GROWTH IN THE NEAR TERM? I MEAN, WE SAW WHAT HAPPENED TO THE STOCK EARLIER THIS YEAR, YOUR RALLYING CRY TO THE TROOPS, OF COURSE, WHO ARE ALWAYS CONSCIOUS OF STOCK PRICE ISSUES. DOES A MICROSOFT ACQUISITION TAKE SOME OF THAT MARKET PRESSURE OFF THE TABLE AND ALLOW YOU TO INVEST WITHOUT THE QUARTER TO QUARTER CONCERNS?
WEINER: THERE'S NO DOUBT IN TERMS OF THE TIMETABLE THERE, JON. YOU KNOW, YOU ALWAYS WANT TO REMAIN FOCUSED ON WHAT IT IS YOU ARE ULTIMATELY TRYING TO ACCOMPLISH. BUT THE REALITY IS THERE'S GOING TO BE VOLATILITY. THERE'S GOING TO BE INCREASING DEMAND FOR REACCELERATING GROWTH AND/OR EXPANDING MARGINS. AND SATYA AND I SHARE A VISION FOR THE REALIZATION OF WHAT IT IS THAT WE ARE TRYING TO ACCOMPLISH AND THE WAY IN WHICH THAT CREATES VALUE FOR THE COMBINED COMPANIES. SO WE ARE LOOKING FORWARD TO CONTINUING TO PURSUE INTELLIGENT GROWTH THROUGH ADDITIONAL INVESTMENT.
QUINTANILLA: YOU SAID ON THE YOUTUBE VIDEO THAT YOU PUT OUT THIS MORNING, THAT YOU HAVE BEEN THINKING ABOUT THIS FOR AWHILE. I WOULD LOVE FOR YOU TO UNPACK THAT JUST A LITTLE BIT. WHAT'S AWHILE? WHO SPOKE TO WHO FIRST? WHAT WERE THE CONDITIONS REGARDING SOME OF THIS? WAS IT ONLY GOING TO HAPPEN IF THEY WERE ABLE TO OPERATE INDEPENDENTLY? CAN YOU TALK ABOUT SOME OF THAT?
NADELLA: YOU KNOW, REID, JEFF AND MYSELF, WE HAVE KNOWN EACH OTHER FOR AWHILE NOW, WHICH IS MULTIPLE YEARS. I THINK THE FIRST TIME I MET JEFF WAS AT A MICROSOFT CEO EVENT THAT WE HOST EVERY YEAR, A COUPLE YEARS AGO. AND WE ALWAYS TALKED ABOUT THIS NOTION OF WHAT DOES IT MEAN TO THINK ABOUT THE PROFESSIONAL NETWORK AND OFFICE IN PARTICULAR, AND HOW THESE TWO GRAPHS CAN COME TOGETHER. BUT WHEN JEFF AND I STARTED TALKING IN FEBRUARY ABOUT WHAT'S THAT NEXT PHASE BEYOND COMMERCIAL INTEGRATION, CAN WE TRULY TAKE WHAT IS TODAY A FRAGMENTED WORK ENVIRONMENT FOR PROFESSIONALS AND COMPLETE THE SCENARIOS MORE TASTEFULLY AND WITH BETTER RELEVANCE, EVEN TAKE THE NEWS FEED ON LINKEDIN IF IT WAS INFORMED WITH THINGS LIKE WHAT PROJECTS ARE YOU WORKING ON, WHAT DOES YOUR CALENDAR LOOK LIKE FOR THE NEXT TWO WEEKS. I MEAN, THINK ABOUT HOW YOU CAN BRING A.I. TO IMPROVE THE RELEVANCE OF THAT FEED. SO THAT'S WHAT EXCITED US. AND THE MISSION, I MEAN, ONE OF THE THINGS THAT REALLY EXCITES ME ABOUT JEFF AND HIS LEADERSHIP IS HIS PURPOSE-DRIVEN CULTURE. AND WHEN I THINK ABOUT OUR MISSION, IT'S ABOUT EMPOWERING PEOPLE IN ORGANIZATIONS ON THE PLANET TO ACHIEVE MORE. THERE'S NO BETTER PLAY TO DO THAT THAN TO REALLY CONNECT THE WORLD'S PROFESSIONALS AND MAKE THEM MORE PRODUCTIVE AND SUCCESSFUL. AND THAT'S REALLY WHAT GOT US GOING.
WEINER: AND BEYOND THE ALIGNMENT ON PURPOSE, SATYA HAD A VISION HERE FOR LINKEDIN TO OPERATE AS AN INDEPENDENT ENTITY, MUCH IN THE SAME WAY AS SAY A YOUTUBE, A WHATSAPP, AN INSTAGRAM, THAT HAVE ALL GONE ON TO EXTRAORDINARY SUCCESS AND IMPACT ON A GLOBAL BASIS FOLLOWING THEIR ACQUISITIONS. AND IT WAS THAT COMBINATION OF ALIGNMENT IN TERMS OF SENSE OF PURPOSE AND STRUCTURE THAT WE BOTH GOT REALLY EXCITED ABOUT.
FORTT: WELL, IT'S A BIG VISION AND A BIG TASK THAT THE TWO OF YOU HAVE AHEAD OF YOU. THANKS FOR JOINING US FIRST ON CNBC. JEFF WEINER, CEO OF LINKEDIN AND SATYA NADELLA, CEO OF MICROSOFT.
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