Microsoft recently purchased LinkedIn, the most popular professional networking site, for a staggering total of $26 billion. LinkedIn has a total of 433 million members, making it a substantial investment for the software giant. But many have wondered exactly what Microsoft seeks to gain through its acquisition.
LinkedIn is the Largest Professional Database in the World
LinkedIn isn’t just a social media network. It’s the largest database of professionals in the world. LinkedIn lists job credentials, history, and even employees who are currently looking for work. This gives Microsoft an extraordinary amount of data that they can pull from if they desire. Microsoft can see how many professionals currently tout their Microsoft Certified Professional status and whether or not it actually impacts the jobs that they get. They will also know exactly who to contact when offering licensing for new products and when on-boarding new talent of their own. Nevertheless, though the Microsoft CEO and LinkedIn CEO are both very optimistic about this acquisition, neither have been clear about their intentions.
A Foray Into Social Media and Networking
Apart from the above, Microsoft may also simply be interested in a social media acquisition. Google, as a similar tech company, has Blogger, Google+, and a variety of communication platforms. Up until now, Microsoft hasn’t had a foothold into the social media arena. Instead, Microsoft has aggressively used Facebook, Twitter, Pinterest and other social media platforms to further their own marketing initiatives. Back in 2012, Microsoft acquired a social networking service for organizations for a total of $1.2 billion, but this initiative never got off the ground. The social networking platform, Yammer, was only able to achieve a total subscriber number of roughly 8 million.
LinkedIn’s Perception of the Acquisition
On LinkedIn’s behalf, the acquisition appears to be a question of scale. LinkedIn’s CEO compared them to the “Tech Titans” of Apple, Google, Microsoft, and Amazon, and indicated that this merger would be something that could help LinkedIn grow. By leveraging the sheer power and resources of Microsoft, the CEO of LinkedIn appears to hope that LinkedIn will be able to scale to a global and pervasive resource, which may be exactly what Microsoft intends. And with a valuation at well over $20 billion, the CEO of LinkedIn has already created a price point that will serve the business in the future.
Many believe that LinkedIn has been primarily acquired so that it can be directly integrated into Microsoft’s Office 365 offerings. That means that LinkedIn could be included within Skype and other applications. But LinkedIn’s data is also important, especially in an era that is steadily moving towards content as a form of value. LinkedIn produces an incredible amount of business-related content, from featured posts to status reports from members. Through LinkedIn, Microsoft will be able to tell which businesses are downsizing and which are hiring; which talent is available and which is in high demand. They will essentially have access to all the information they need across all industries and markets.
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