Like many people I was rather surprised by the announcement that LinkedIn, the mammoth social media network for professionals, is being acquired by Microsoft. The $26.2 billion deal was announced yesterday, with assurances that LinkedIn and its estimated 433 million users will continue to operate as a separate unit under Microsoft’s umbrella.
It seemed strange because heretofore Microsoft has gone conspicuously out of its way to avoid the social media battlefield, where Facebook and to a much lesser extent Twitter reign supreme. Indeed, they seem to have refocused their energies on being a software company, even going so far as to shutter their once-dominant browser, Internet Explorer.
So why this move now, and what does it mean?
(I should point out that while the boards of both companies have already approved the deal, it still awaits sign-off by regulatory agencies.)
According to TechCrunch, which has made mergers & acquisitions of tech companies its journalistic bread-and-butter, this is more about Microsoft building its social networking services and professional content. They note the company’s acquisition of “private” social network Yammer in 2012 for similar reasons.
“For Microsoft, it’s bringing a key, missing piece into the company’s strategy to build out more services for enterprises, and give it a key way to compete better against the likes of Salesforce (which it also reportedly tried to buy),” reporter Ingrid Lunden wrote.
Translation: this will provide Microsoft with a large channel through which to market and sell its existing products.
This especially makes sense when you think about how Microsoft is transitioning to a subscription-based model for its titan-like Office suite and other software. They no longer want to get you to buy a box of CD-ROMs once every few years, but get you on the hook for monthly payments ad infinitum.
While LinkedIn is an important platform that companies want to be on, it operates mainly as a place for job seekers and recruiters to connect, or as a source to learn information about a particular company. It’s not necessarily a place where people go scrolling for news or social engagement.
My prediction: assuming this deal goes through, you won’t see much difference in your day-to-day use of LinkedIn. Do expect to find more integration with Microsoft products like Cortana, Windows’ version of the digital “personal assistant,” that inevitably point you toward other features you can pony up for.
Some, such as PC World’s Mark Hachman, have gone so far as to insist a Cortana-LinkedIn synergy is what the deal is really all about.
“Jeff Weiner, the chief executive of LinkedIn, said that his company envisions a so-called ‘Economic Graph,’ a digital representation of every employee and their resume, a digital record of every job that’s available, as well as every job and even every digital skill necessary to win those jobs,” he writes.