Even though Microsoft surprised the world with its LinkedIn
acquisition valued at $26.2 billion, it's really not a huge price to
pay for a successful social network, even though it tops the charts
as Microsoft's biggest-ever acquisition.
As Microsoft CEO Satya Nadella's first major acquisition, the
success or failure of LinkedIn will define him as the leader of
Microsoft's increasingly service-driven future. While many are
surprised at the cash figure, the question on everyone's lips is, why
does Microsoft want LinkedIn?
So many interpretations come to mind when you want to analyse this
move. One of the major ones are those from Nadella's internal memo
which does a good job of providing a basic outline to partially
answer that question, and more. Nadella points out that LinkedIn is
"how people find jobs, build skills, sell, market and get work
done." It's a key tool in the professional work space, with 433
million members and more than 2 million paid subscribers. Microsoft
itself has more than 1.2 billion Office users, but it has no social
graph and has to rely on Facebook, LinkedIn, and others to provide
that key connection.
LinkedIn provides Microsoft with immediate access to more than 433
million members and a solid social graph that, thanks to its
professional nature, is matched closely with the software and
services Microsoft provides. In the same way that most kids play
Minecraft, it's reasonable to assume most adults in the US use
LinkedIn for finding jobs, connecting with colleagues, or just
general work-related networking.
"This combination will make it possible for new experiences
such as a LinkedIn newsfeed that serves up articles based on the
project you are working on and Office suggesting an expert to connect
with via LinkedIn to help with a task you're trying to complete,"
says Nadella. As these experiences get more intelligent and
delightful, the LinkedIn and Office 365 engagement will grow. And in
turn, new opportunities will be created for monetization through
individual and organization subscriptions and targeted advertising."
Nadella's example in his internal memo is only a small part of how
Microsoft envisions its future with LinkedIn. LinkedIn will be the
central professional profile that will be surfaced in apps like
Outlook, Skype, Office, and even Windows itself. Microsoft wants to
turn LinkedIn profiles into a central identity, and the newsfeed into
an intelligent stream of data that will connect professionals to each
other through shared meeting, notes, and email activity. It's a
future of using a strong social graph and linking it directly into
machine learning and understanding, an area Microsoft has showed
great interest in recently.
Microsoft even provides an example of Cortana connecting to
LinkedIn to provide context on people you might be meeting
professionally. It's something the company has been working with
LinkedIn to integrate recently, but it's clear Microsoft sees
LinkedIn as a big part of making Cortana more intelligent in the
workplace. LinkedIn still has a reputation for being a spam machine,
and recent password dumps have dented its security credentials.
Microsoft will need to clear up both of these problems if it wants
LinkedIn to be taken even more seriously by businesses.
These product examples and features all feed into a social network
that's designed to combat rivals in the workplace. Google and
Facebook have both shown interest in expanding into the social
workplace, but LinkedIn has the advantage of being seen as the
professional network. Microsoft might not be discussing rivals
just yet, but this LinkedIn acquisition is a big bet on the future of
machine learning and the ability to secure its control of enterprise
software and services.
Microsoft now has a huge social network to fend off advances from
Google's suite of productivity services, but it still needs to
convince businesses not to use Facebook at Work or Google Apps
instead. It also faces the tough job of integrating LinkedIn into
Microsoft's software, services, and management. Microsoft's previous
acquisitions have been mixed affairs. The software maker acquired
Yammer nearly four years ago, and bought Skype for $8.5 billion back
in 2011. Both of those acquisitions have been integrated more closely
into Microsoft's Office business, but they haven't been particularly
rewarding.
LinkedIn is a different beast, and many outsiders will be watching
patiently to see exactly how well Microsoft integrates the social
network into everything the company provides for businesses.
Microsoft’s enterprise-centric intentions are clear, and it has
gone on the offense today to prove it.
So far the acquisition of LinkedIn has spiked the value of
Twitter. The social network gained 6.8 percent to $14.97 at 10:54
a.m. in New York after rising as much as 9.1 percent, the biggest
intraday jump since April 4. The social network’s stock had dropped
39 percent this year through Friday as investors questioned whether
the struggling company can broaden its appeal to people who don’t
already use the service. Its either an anticipation of take-over
interest from rivals Google, or even an expectation of Microsoft
courting.
But just imagine this: with the realisation that YouTube and Gmail
may be absent from future Windows phone editions (both being owned
by Google), wouldn't it just be a sucker punch to have LinkedIn and
Skype only on Windows platform?
