Microsoft has added LinkedIn to its professional network. (Oh, wait, did someone already use that line?) The Seattle-based tech conglomerate announced Monday that it’s acquiring LinkedIn for $26.2 billion, which is almost 50 percent more than the stock was worth when the markets closed Friday.
On paper, it’s a perfect match between two tech companies so maligned that wags on Twitter couldn’t decide whether to joke about how Microsoft would ruin LinkedIn, or vice versa.
But if the connection between the two companies is anything like the ones people usually make on LinkedIn, they’ll probably forget about it within 10 minutes, at least until their first work anniversary.
LinkedIn CEO Jeff Weiner, who will stay on in that role, said in a memo to employees that his company will function as a “fully independent entity within Microsoft,” citing the way Google and Facebook have treated prominent acquisitions such as YouTube, Instagram, and WhatsApp. He assured employees it will be mostly “business as usual.”
Let’s hope that’s a false assurance.
Buying LinkedIn could be a smart move for Microsoft—but only if it figures out how to seamlessly integrate its social graph, or what Weiner calls its economic graph, into its other software. That isn’t going to happen via business as usual. And it certainly isn’t going to happen by respecting LinkedIn’s independence from the rest of the company.
If it’s going to extract real value from the most expensive acquisition it has ever made, Microsoft needs to start by admitting that LinkedIn, as a standalone service, is not very exciting. It works well enough for job recruiters, depending on the industry, and can be a powerful research tool if you know what you’re doing. For the average user, however, it’s a de facto public bio, an impersonal alternative to friending people on Facebook, and an inexorable spam machine. Those use cases have their value, but they basically haven’t changed since the service’s early days.
As a business, LinkedIn has always had enormous potential, thanks largely to its insurmountable first-mover advantage among professional networks and the vast, rich data set on the world’s businesses and employees that it now owns as a result. So far, it has capitalized on that data primarily by charging corporate recruiters to find job candidates. It also sells sponsored posts in the LinkedIn News Feed, which is full of listicles aimed at people who think they’re just nine easy steps away from finally taking back control of their time.
These are fine and relatively obvious ways to make money if you’re a medium-large tech startup, but they pale next to what a company like Microsoft could do with this sort of data. Just for starters, it could make LinkedIn the default bio/identity service across its apps and services, including Office, Sharepoint, Skype. Why switch to Facebook for Work when the software you already use at work has its own Facebook built in, minus all the stuff about people’s private lives?
More interestingly, and perhaps controversially, all that data on companies and employees could be turned into a knowledge base for Bing and, especially, Cortana, Microsoft’s virtual assistant and its answer to Siri and Google assistant. PCWorld’s Mark Hachman envisions Cortana prepping you for a business meeting and whispering names and biographical details in your ear:
Right now, Cortana provides some basic information about your calendar, suggesting, for example, what time you’ll need to leave to ensure you arrive at your next meeting on time. In Microsoft’s digital future, Cortana will be able to sum up what you need to know both about your business relationship, and what information you can use to cement a more personal connection, too. It sounds smarmy, but a good salesperson will tell you that an emotional connection helps seal the deal.
Paul Ford at Track Changes has his own LinkedIn-ready listicle of 9 Things Microsoft Could Do With LinkedIn, some more realistic than others. And in press interviews on Monday, Microsoft CEO Satya Nadella made it clear he, too, has been thinking about creative ways to integrate the professional network into his company. Those include building it into Microsoft’s human-resources and customer relations management software. Such a move could give Microsoft’s CRM tools a social edge over Salesforce, which it tried and failed to acquire last year. Nadella also mentioned serving people an “intelligent newsfeed” based on their LinkedIn profiles, which sounds sort of like the Facebook news feed, only superboring.
It’s understandable that Microsoft would want to follow the Facebook/WhatsApp model of a “company within a company,” given its history with Skype and Yammer, two communication apps that lost ground to more focused rivals since their acquisitions. Of course LinkedIn will still need its own brand, app, and resources if it’s to remain the leading professional network.
But Microsoft will need to be careful not to let LinkedIn’s desire for independence stand in the way of all those exciting integrations Nadella has in mind. Finding theoretical synergies between the two companies is one thing. The hard part, as always at Microsoft, will be implementing them.