Why LinkedIn Acquired by Microsoft is Important

Why LinkedIn Acquired by Microsoft is Important

 I'm a fan recently of corporate mergers, and this one influences our community. Who knew Microsoft wanted to become a social network business hero? I thought there was a greater chance they'd acquire Slack of even Salesforce. Indeed I can imagine LinkedIn benefiting from this tremendously.  Let's face it, LinkedIn more than stubbed their toe back in February. On the flip side: 

LinkedIn has not had a bad Q1, with total revenue increased 35% year-over-year to $861 million. The mobile app seems to have improved, though $26.2 billion is still an epic acquisition and marks a huge turning point for both companies. Indeed this is not a bad thing and has some quite interesting potential which I shall try to explore in this article. Microsoft LinkedIn, no problem: 

LNKD shares jump 47%, as a result of the news. 

This has the ability to impact how LinkedIn continues to scale and the 433 million global professionals using it. With total revenue of $3 billion @ LinkedIn, you felt both of these firms needed to do something big in order to stay relevant. 

Mergers, automation and shakeups in the tech sector are just getting started really. Our collective digital reality is set to evolve at an exponential pace, and the cloud and professional networks especially, are a huge part of that. 

Microsoft LinkedIn, does have a nice ring to it! The ways the two could work together also provides a lot of possibilities and herald truly the Satya Nadella era for Microsoft that needs to redefine itself to stay contemporary

Alliances to Face a Changing Tech Landscape 

The world is changing, and how LinkedIn can leverage the importance of relationships in transition to a new kind of economy, one increasingly based on information and connectivity.

With Parag Khanna's Ted talk about the future of cities, I can also feel how urbanization is replacing countries as the world starts to set its sights on a new globalized world order and future vistas such as the colonization of Mars, the obsession of Elon Musk, one that China is likely to enthusiastically pursue and out-doing NASA on. The planet is shrinking in the digital economy and how the cloud interacts with professional networks is a big part of this. 

Technology is catapulting human beings into a future where we are not only more connected but reach higher, further, faster. That's what cloud, mobile and VR tech can do.  

So technology like Microsoft and networks like LinkedIn, are truly also helping us fuel the innovation of the future. 

Disruption has Many Faces

The world is on the brink of even more disruption: 

  1. Automation 
  2. Wealth inequity & socio-economic statification 
  3. Increasing maturity of machine-intelligence
  4. The rise of the on-demand and sharing economy disrupting many sectors with more to come
  5. Countries with climbing debt to GDP ratios 
  6. New mobile connectivity changing the world such as the FinTech sector
  7. Increasing competition to find and establish quality careers (skills gap, worker displacement, youth unemployment, etc..)
  8. Increasingly immersive mobile digital and VR realities on the horizon 
  9. Global warming, population growth and immigration 

How global corporations can better serve people therefore is extremely impactful. A LinkedIn that's connected to but still independent can benefit from Microsoft, as can Microsoft given the diverse ecosystem of LinkedIn products. 

Keeping up with the Big Five 

How Amazon, Google, Apple, Facebook, Microsoft and others evolve in extraordinary scale and innovation, influences all of us, we're all connected.

That Silicon Valley must consume itself to get better is not entirely surprising with how in a sense (the rich keep getting richer) the elite tech companies compete with each other for market shares and with innovation moreover, it's competition at the top levels drives these sorts of things. 

LinkedIn is in the middle of adolescence, founded in 2002, it is 14 years old. With 105 million unique monthly visitors, it's de factor  status as the go-to professional network, makes it well positioned without significant rivals in the B2B space and as a veritable database of professionals and services. After going public in 2011, LinkedIn proved in a sense, that it knew how to monetize social media. The dream that escaped older sister Twitter thus far. 

Competing with More Engaging Networks

LinkedIn needs refueling to grow, and from the end user, things have not been smooth sailing necessarily in the LinkedIn experience, as can be seen by some of the users of LinkedIn Pulse who feel under appreciated compared to the syndicated Influencers.

For Sales cycles and recruitment, LinkedIn still has enormous importance and untold relevance. However, that's not to say that LinkedIn holds the attention of its audience, far from it.  

According to the Pew Research Center recently found an incredible 61% of LinkedIn users only visit site every few weeks. This means the LinkedIn product team have their work cut out for them to raise the engagement of the platform. Increased integration with Microsoft products may be part of the equation and solution to this engagement issue. LinkedIn as measured by time spend per use by month, lags behind the likes of Facebook, Instagram, Snapchat, Pinterest and even Twitter. 

Microsoft's last acquisition that made waves was 5 entire years ago, when in 2011 they acquired Skype for $8.5 billion. If Microsoft is able generate the right kind of synergy between LinkedIn, Microsoft Office 365, and Microsoft Dynamics, its enterprise resource planning (ERP) and customer relationship management (CRM) software suite, this deal will all make sense. 

While some pundits now may say the price was rather steep. This makes Facebook's acquisition of WhatsApp in an attempt to get even more users (rather than profits) seem on point. 

Pioneering Greater Connectivity 

But honestly, what could it mean?

More Robust New Features for Business

-1- Microsoft enabling LinkedIn's multitude of features to be more integrated with more robust APIs. 

 

On Demand - Sharing Economy

-2- Microsoft LI being a player in the on-demand economy, with its new Pro-finder tool. 

 

Growth

-3- LI expands its user-base via the Microsoft ecosystems, becoming even more relevant.

 

Scale

-4- The ability to offer a new class of products that integrates both eco-systems. 

 

Evolving the Personal Brand Forwards

-5- This makes LI a platform where your personal brand can scale into the future, now we know LI has a more secure future. 

 

Microsoft LinkedIn - Towards a Better Brand

The bottom line is $26 Billion is too much money to go in blind, this has surely been a well thought out play to ensure Microsoft can remain relevant in the cloud and expand in connectivity to the real world. 

A leader in the cloud and the best interface and most used professional network, clearly the synergy of the two companies can be high and they can drive value reciprocally. Only Dell's acquisition of EMC last year for $67 billion can rival this in the tech on tech space, but this is more tangible for the everyday person. 

Microsoft had to do something to keep up with Google, Facebook and Amazon's staggering growth. Weiner even makes Nadella look better, if you notice their video that was widely shared on Monday this week. 

Business platforms are about leveraging professional relationships, and here we find companies that can empower each other, and that's the key here. It's a win-win for both parties, and hopefully for global citizens. In an age where an economic global downturn feels increasingly likely, companies that make the world a bit smaller may be good. 

LinkedIn Indie Influencers 

LinkedIn has around 500 unpaid independent influencers. These are Linkedin pulse writers who are not only power users but whose articles tend to get high engagement and have been recognized as storytellers, futurists, marketers and pioneers of their industry's knowledge advocacy add tremendous value to the site's content. Though what happens to them if they are not featured? How to monetize their efforts that they keep contributing?

LinkedIn's content platform called Pulse has huge if unfulfilled potential. How professionals and their insights can scale into influencers is one of the key engagement journeys that LinkedIn has to figure out for engagement to increase for the ordinary reader and for the talented up and coming writers in industry, who have the knowledge authority but may be too busy to contribute to Pulse often.

In 2015, LinkedIn initiated drumroll for some of these influenced called Top Voices, to give some recognition to these unpaid writers that was a good first step. Though since then it can be observed that participating among the pulse influencers has dropped in North America, while it has risen in places like India. 

Last Thoughts

  • A social-identity layer for Microsoft
  • Cortana at the service of LinkedIn 
  • Skype fully integrated with LinkedIn
  • LinkedIn getting some of Microsoft's customer base to use LinkedIn in a more integrated and active way. 
  • LinkedIn Pulse being directly accessible in Windows 
  • Lynda available courses being more accessible 
  • Better new features for LinkedIn to increase value and convenience 
  • Outlook being smarter and recommending LinkedIn connections 
  • Innovating and massively scaling LinkedIn's reach 
  • Improving how corporate search directory is done and facilitated for the data-age
  • Leveraging human capital in a more seamless way for recruiters, job seekers and companies
  • Scaling how employee voice and corporate culture impacts professional company brands. (Facilitating employee driven content)
  • Evolving social selling to the next level with Microsoft expertise 
  • Keeping LinkedIn's position as the number one business professional network intact
  • Fully harnessing the full potential for the Gig economy of freelancers and independent service providers. 

If you enjoy my articles and want to continue seeing me write on pulse, feel free to nominate me as a LinkedIn Top Voice. Please share this post on Facebook. 

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My 473

Do you think this is a functional partnership between Microsoft and LinkedIn, or one with potentially disastrous consequences?
John Marrett

Helping mid-sized organizations increase sales and improve customer service since 1993 | #LinkedInLocal

8 年

Thanks Michael, excellent analysis.

Debasish Majumder

Ambassador at beBee, Inc. Global Goodwill Ambassador.

8 年

Lovely insightful post. enjoyed reading. thank you for sharing the post.

Rahul Davé

Enterprise Architect (Tech, Biz & Digital) IEEE IMT MITx

8 年

Very Good one. This is "Analyse de qualité supérieure"

Qamar Ali Khan

Freelance Management and Marketing Consultant

8 年

Michael! This is a great insight. You analysed the deal from different perspectives. MSLI deal will benefit both the parties. In my opinion, MS will take over the complete command after getting used to LinkedIn's way of working. This deal surely will benefit MS more, as a solid base of 433 million potential customers or leads in hand. The Li users will benefit from the innovative side of MS. This deal was necessary, as Li was sinking fast. This deal has saved the faces of Li top management, at least, for the moment. Michael! I'm not a tech guy. Whatever I observe or say is my perspective as a business manager. The major thing to be successful is to make everything transparent to every interested party, or stakeholders. LinkedIn is a great platform, but poorly managed. I hope MS will make the things far more better.

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