What We Know About Microsoft's Acquisition of Social Media Site LinkedIn
The biggest-ever software acquisition has recently occurred, and it impacts a service you’re probably using. By now you’ve heard about Microsoft’s bold purchase of social media business leader, LinkedIn. However, what does this purchase mean for the future of LinkedIn and its users? How will your experience as a workplace manager on the site be affected? Let’s take a look at everything we know so far, and what we can expect to see soon.
In June of this year, Microsoft announced they were entering the social media technology market by purchasing LinkedIn for $26.6 billion, the largest in the company's history. Microsoft even outbid cloud-based rival Salesforce – which hosts businesses’ marketing and customer relations systems – to buy it. This acquisition links two business powerhouses, one a large maker of software tools and the other the largest business-driven social network of its kind. Both corporations have made most of their revenue by catering to professional people, so it seems like a natural fit.
Satya Nadella, Microsoft’s chief executive officer said, “This deal is all about bringing together the professional cloud and professional network.”
Many experts believe this is a strong indication of where software is headed, cloud-based solutions are clearly becoming the standard and large corporations are getting their foot in the door. Microsoft has promised to keep LinkedIn as an independent site, rather than being incorporated directly into their existing platforms. While the exact plans for the purchase are somewhat unclear, Microsoft has made many large tech purchases in the past. They acquired Skype in 2011 for just over $8 billion, and back in 1987 they purchased the rights to PowerPoint before it was known by the name. However, not all of their expensive shopping trips have been profitable. They bought Nokia back in 2013, and recently wrote the purchase off as a loss, yet the LinkedIn endeavor seems to have promise according to the leaders of each organization.
The company has released their plans to incorporate LinkedIn into its cloud services. Here are some of the changes that they have been discussing:
- expansion beyond recruiting, to create value for organizations that are hiring
- changes to subscription memberships to open opportunities for freelance and independent service providers
- greater integration with Microsoft programs: Skype, Bing, Outlook and Office
- broadening Lynda, LinkedIn’s learning solution in Office
- developing innovative solutions for company news dissemination, distribution of business intelligence and corporate directories
These ideas would definitely help connect the professional world internally and externally. It could seamlessly blend interview processes, corporate communication initiatives, and could simplify many tasks for larger organizations. However, not all criticism of this purchase has been positive. At $255 per active user, this was quite an expensive purchase for Microsoft, and many experts are wondering how the company will justify the expense. LinkedIn's revenue was just $3 billion last year.
How This Impacts You
Just after the announcement, LinkedIn’s stock soared 47% on the news. If you like Microsoft products, you can expect this to be a positive change. However, if you don’t, your profile may be a bit more annoying to work with. For example, Microsoft’s automated speech assistant, Cortana, might be ale to prep you before your meeting with your newest employee - telling you information like you both follow the Houston Rockets or went to school in Chicago.
This purchase may also make your news feed even more relevant to the types of posts you want to see. The two companies have promised an enhanced “intelligent news feed” that will share the proper mix of work-related news and updates from connections.
LinkedIn CEO Jeff Weiner wrote a letter to his company, explaining the decision for the sale.
He said, “Our mission to connect the world’s professionals to make them more productive and successful, and our vision to create economic opportunity for every member of the global workforce.”
From the immediate response at the stock market, to the various business articles written on the subject, this purchase seems to be ruffling some feathers but appears to be mostly viewed as a positive change. Only time will tell of its true impact, but we will keep an eye out for anything of relevance. It will be an interesting few months to see if and how this alters the social media landscape in the future.