Three Reasons Why Microsoft Should Buy LinkedIn

NEW YORK (TheStreet) -- Since Bill Gates stepped down as CEO of Microsoft (MSFT) in 2000, the stock has been sluggish.

Microsoft has struggled because the company lacks a vision for the future. As shown by the chart below, the multiple on Microsoft's stock has contracted as investors expectations' of growth have dimmed. To turn the tide, Microsoft needs to take bold action. One bold step would be to buy LinkedIn (LNKD). Here are three reasons why I believe Microsoft should do that.

MSFT ChartMSFT data by YCharts

MSFT PE Ratio (Annual) ChartMSFT PE Ratio (Annual) data by YCharts

1. Jeff Weiner Becomes Microsoft CEO

Microsoft has been looking for its next CEO since after Steve Ballmer announced his retirement last year. LinkedIn CEO Jeff Weiner would be a great choice to replace Ballmer.

Weiner, who joined LinkedIn in 2008, has proven to be a capable leader. Since going public in 2011, LinkedIn has consistently surpassed high expectations. It's not known whether Weiner would be willing to leave LinkedIn to become Microsoft CEO. But if Microsoft were to buy LinkedIn, then Weiner would become the logical choice to be Microsoft's next CEO.

2. Microsoft Goes Social

Social media has become one of the most important aspects of the Internet and of technology more broadly. Microsoft failed to anticipate the growth of social media as an important business opportunity. 

The only way now for Microsoft to make itself a major playing in this emerging part of the technology industry is to make an acquisition. The three most relevant social networks are Facebook (FB), Twitter (TWTR) and LinkedIn.

If you liked this article you might like

How To Get a Promotion Using Legendary Former GE Head Jack Welch's Strategies

Microsoft Has Been Reborn Under CEO Satya Nadella

How to Make Your Life Successful Just Like Billionaire Warren Buffett

Hewlett Packard Enterprise Becomes the Latest Tech Titan to Slash Jobs