Thoughts on MS buying LinkedIn

[BluetoothFairy1]

LinkedIn is in financial trouble. Perhaps MS can help turn in around, but I have my doubts. Can anyone point out any recent MS buys that panned out? We all know what the Nokia purchase did!!!

People at Mojang may disagree with you.
Also, keep in mind that this is a first major acquisition under Nadella, all the other failed ones were from previous leadership, so using historical comparisons here may not work.

 

[BluetoothFairy1]

Nadella is very bright and has a clear vision of where he wants to take his company.
Buying LinkedIn was clearly fitting his strategy. I had read both CEO letters to their employees and they revealed a lot.

The most important piece was in the LinkedIn letter, talking about the emerging displacement of many and many workers, due to machine learning (or automation, robotization, whatever you want to call it). Those people will be looking for jobs.

- Microsoft focuses on cloud.
- Microsoft focuses on enterprise.
- Microsoft doesn't have a major social network footprint.
- Chrome OS (with Google Docs) gaining access to Android apps, could spell serious trouble for Office and Windows in enterprise.

Imagine LinkedIn as a framework the enterprise could buy as a service and deploy inside, intranet on steroids. You package of Azure, Office, OneDrive, Skype for business, and all other services.... makes perfect sense...

If that did not convince you, what about the warchest of data LinkedIn is sitting on? All the connections, people skills listed in user profiles, or what job they are looking for? That is like a spyglass other companies would give up a leg for...to see where the enterprise is heading.

I think this was a brilliant acquisition. Though pricey.

 

[SashaSolitaire]

I think that this is a great purchase. In the US, Salesforce.com has a monopoly on CRM software. But what Salesforce lacks is the global list of professionals which can be used by sales/marketing of their customers as a ready-made list of leads. That's where MS's purchase of LinkedIn makes a lot more sense. By tying it up with Microsoft Dynamics which is already displacing a lot of smaller/lower-end CRM providers, Microsoft is setting itself up as a competitor in the CRM domain. I work for a company that provides analytics for F1000 companies that aid them in identifying leads that are more likely to convert and one of the biggest needs there is a proper LinkedIn profile.

I am not aware of others, but most of the people I work with and work for always keep their LinkedIn profiles updated. Having this as an integral part of your product offering makes great sense for MS, especially with their deep integration in professional workflow through MS Office and the up and coming CRM domain through MS Dynamics. Tie this with Azure in the back-end and it could potentially become the differentiator in whatever MS has to offer in these domains.

Still early days to see how this will turn out, but my bets are on MS on this

 

[vEEP pEEP]

it's FB for work. Might buy more credibility for social networking at the workplace? HR could use it for employees? o365 integration?
not sure if 26 billion is a good deal...

 

[QuietNine]

In terms of TIMING: LinkedIn lost over half of its stock value over the past few months. From an acquisition standpoint, this is a great time for purchase for MS, even with them overpaying a bit they still came in way, way below LI's market high.

In terms of IRRELEVANCE: LinkedIn by itself cannot easily be replicated. Competition problems that plague Nokia, Yammer and Skype don't apply here.

In terms of PROFIT: LinkedIn has generally been a break-even company (+/- 5% margins). They haven't posted major profits OR major losses. Their primary expenses are Corporate Sales and R&D. There is every reason to think that a MS acquisition will drastically reduce those expenses since MS does both very well already, which should push them to margins (not profits) more consistent to what facebook sees.

In terms of WIIFM (whats in it for microsoft): Aside from acquiring something they can easily turn into a positive profit stream, a lot. Imagine Bing integrating LinkedIn results to search. Imagine being able to watch trends in what people are learning and recruiting for and being able to react to that. While this may not lead to more Office sales (market saturation), its important for the visibility they need to keep Office dominant, and it may very well lead to contacts that help Azure better compete with Amazon.

Is it worth $26B? Considering it should only take the smallest nudge to move LI from break-even to consistently profitable, and considering the heavily discounted price from just a few months ago, yes, its very likely to be a boon for both companies.

The hard part is keeping LI from eating itself. Like other social networks, it thrives on real people but dies as its poisoned by bots and spam. Those are problems LI has been lazy to solve but are very important to solve for a positive UX.

 

[Danobe]

It is quite simple. Google and Facebook are among the biggest companies in the world by having great user data collection (or spying as some prefer). But Google fails to have reach personal data and Facebook fails to have reach behavioral data. Collecting all that data in one space (Microsoft) will be worth 26 billion for sure.

Though if it turns out to be truth (and I really can't see anything else), I'll probably stop using Microsoft's services and technologies whenever I can.

Yup, that is the reason I don't do Facebook, and the reason I won't own Google products, nor use their "cloud office".

 

[manus31]

My immediate concerns are for my privacy and how my data will be used

 

[mjperry51]

My immediate concerns are for my privacy and how my data will be used

Unless MS modifies the Privacy Terms they are bound to the Terms in place when they bought LinkedIn.

 

[Danobe]

Unless MS modifies the Privacy Terms they are bound to the Terms in place when they bought LinkedIn.

Until they update the privacy terms.

 

[Johnny Tremaine]

Like other social networks, it thrives on real people but dies as its poisoned by bots and spam. Those are problems LI has been lazy to solve but are very important to solve for a positive UX.

The meme over the past year or so has been satirizing the LinkedIn email spam and sense of user desperation: "Hi, I'd like to add you to my professional network on linkedin".

So much so, that The New Yorker magazine published a few cartoons spoofing it

 

[Johnny Tremaine]

And this:

 

[T Marcellus]

Awesome prediction

 

[Great deal]

My immediate concerns are for my privacy and how my data will be used

Have you sat down and actually read through the Linkedin Terms and Conditions when you signed up?

 

[Silent Patriot]

I'm waiting to see the pink slips for the irony to fully sink in. :winktongue:

 

[mjperry51]

Until they update the privacy terms.

They have to tell you the Terms are being updated, at which time you can agree or leave. If you don't agree they have to abide by the Terms in place when they bought. . .

 

[Danobe]

They have to tell you the Terms are being updated, at which time you can agree or leave. If you don't agree they have to abide by the Terms in place when they bought. . .

Yes, of course. The argument was that if MS wanted to do data mining to an extreme extent, it would be something to avoid. Then the response to that implied that they couldn't do that due to their terms. And my response to that was that they can simply update their terms (i.e they're temporary terms, so their current terms means absolutely nothing).

 

[Spectrum90]

A professional social network, as a system to increase the efficiency of the labor market and the productivity of individual workers, could be a huge business. However, I don't think LinkedIn or Microsoft have the competences to make it work.
In its current state LinkedIn is not very useful.

 

[mickrich]

Dynamics CRM is my forte for past six years... Based on my experience with various clients, I think this is a very good acquisition. Its like this.. MS already has yammer for enterprise collab.. now they need something like Facebook to be integrated with CRM, which can enhance the social listening skills thereby enriching contacts, leads, accounts information almost at real-time. This will help them to understand the needs of their customers, say to run a campaign..

Ofcourse you cannot buy facebook, the next big thing that has billions of users is obviously linkedIn and considering its a professional network we can expect that it is with updated information.

Microsoft is competing with Salesforce.com by bringing in huge amount of data that a Dynamics CRM customer can use.. I think this is a very good buy.. But we need to wait, to see how the integration is going to happen and what is going to be LinkedIn's future. Hope everything goes well..

Shouldn't turn out a nokia..

 

[Pierre Blackwell]

We're quick to point out the Nokia failure when it comes to purchases made by MSFT, however was it really a failure because it hasn't shown a growth the likes of Apple or Google in the past six years? Some investments by dividends immediately, where most pay off in the long run. I actually look at the Nokia purchase not being a total bust for MSFT, and the technology acquired by that purchase will eventually pay dividends. The purchase of Skype still hasn't truly paid dividends, but I think MSFT is just scratching the surface with how to really utilize it and now with LinkedIn, I can see that expounding from a business and enterprise perspective. These purchases will take years to really pan out but I do think LinkedIn was something that if MSFT's focus is to be the enterprise part of the spectrum, it was a necessary purchase. The Minecraft purchase was a good one, but what I'm really looking forward to is when you integrate it with Hololens.
I think sometimes MSFT has their hands in so many pots its hard to see what direction they're trying to go in. I do think however they have been doing a pretty good job as of late and I expect that to continue.

 

[Laura Knotek]

We're quick to point out the Nokia failure when it comes to purchases made by MSFT, however was it really a failure because it hasn't shown a growth the likes of Apple or Google in the past six years? Some investments by dividends immediately, where most pay off in the long run. I actually look at the Nokia purchase not being a total bust for MSFT, and the technology acquired by that purchase will eventually pay dividends. The purchase of Skype still hasn't truly paid dividends, but I think MSFT is just scratching the surface with how to really utilize it and now with LinkedIn, I can see that expounding from a business and enterprise perspective. These purchases will take years to really pan out but I do think LinkedIn was something that if MSFT's focus is to be the enterprise part of the spectrum, it was a necessary purchase. The Minecraft purchase was a good one, but what I'm really looking forward to is when you integrate it with Hololens.
I think sometimes MSFT has their hands in so many pots its hard to see what direction they're trying to go in. I do think however they have been doing a pretty good job as of late and I expect that to continue.

I think the issue is the time Microsoft takes to do anything. Microsoft acquired Skype 5 years ago but hasn't really done anything with it. 5 years is an eternity to a stockholder.