With a price tag of $26.2 billion USD, Microsoft’s acquisition of LinkedIn is by and far the biggest tech buyout in history. Described by investment bears as a Hail Mary pass on the part of Microsoft, a giant that some see as in the process of a shortfall. The announcement came with more than a fair share of head-scratching.
While LinkedIn remains by far the leader in professional networking and recruitment. But concerns about how much larger the world’s largest professional social media service can grow have led many to declare the buy as a desperate play. An attempt on Microsoft’s part to capture the social media market by storm.
Is Microsoft really putting itself one the line with a risky and exorbitant new property? Or is Microsoft CEO Satya Nadella seeing a new and overlooked opportunity to turn enterprise on a new heel?
How LinkedIn Set the Sale
To many job seekers and so-called “casual” professionals, LinkedIn has appeared as a stifling (albeit valuable) platform for finding work opportunities. As a social media network, LinkedIn boasts among the weakest engagement rates among its users, with only 25% logging monthly. Marketers see it as a weak advertising platform as well. Many believe that LinkedIn is a social media platform that, still growing month-over-month, has limited value to a tech giant like Microsoft.
LinkedIn, remains, however, the only network to monetize three channels: ads, subscriptions, and promoted content. And we’ve seen significant divestment from Microsoft’s end as a software company: Mr. Nadella famously quoted as saying that Windows 10 was no longer “a program”. its primary rivals in network influence: Google, Amazon and Facebook, have been reluctantly slow to adapt to what LinkedIn’s hidden strength has always been: it crushes the market in Content.
Publishing directly on LinkedIn’s platform has been a mainstay of LinkedIn’s success, proving that while utility can make the user base, it’s content that makes the company. Nearly every major IT company in North America has dabbled in LinkedIn publishing over their own websites or blogs, and it’s delivered directly — and precisely — to the audiences these businesses need. Google, while still ever the content giant, simply has not been able to compete in delivering relevant content.
LinkedIn remains the professional resource that millions of users access. And as they say: he who writes history, makes history.
The Implications Could be a Lot Wider Than We Think
Microsoft’s tapping into the LinkedIn platform goes well and beyond what LinkedIn will be able to provide Microsoft in terms of the world’s largest professional content source. It also gives Microsoft the opportunity to build Enterprise where other social media networks have failed.
Consider, if you will: Skype. While no one would argue Skype has improved under Microsoft, it’s an important key service in telecommuting and inter/intra-business communication. Integrating Skype and LinkedIn would provide businesses faster means of finding and communicating with potential talent.
Even beyond acquiring talent, there’s even more potential to integrate LinkedIn to Microsoft’s existing workflow software. Publish directly to LinkedIn via Microsoft Word? Request an coworker complete a spreadsheet by pinging their account? And given Microsoft’s total dominance of the PC market, could it be possible that in 5 or 10 years that every single working professional is always hooked into LinkedIn’s network at all times?
Microsoft has remained mum, of course, about the potential of this acquisition, leading to exactly this sort of speculation. As a money-maker, LinkedIn’s potential has proven to be shaky at best. As a player in the business world, however, it gives Microsoft the ability to integrate the world’s most prevalent software with the world’s biggest businesses.
And that’s worth a whole lot more than ad revenue. Facebook take heed.