Why Microsoft bought LinkedIn – Webnews

Recommended products based on the projects on which you are working, software cloud shared with other professionals to complete them. These are two of the many possibilities opened up by the acquisition of LinkedIn by Microsoft , the third most expensive ever in the industry, a figure, 26.2 billion, higher of what Facebook has paid to have Whatsapp and greater than one half of the market value of LinkedIn. The stated purpose of the same Satya Nadella and the documentation provided to investors is to build an environment more connected experiences, intelligent and productive in the professional world.

In a letter to employees, Microsoft CEO illustrates few words the meaning of this operation: “Bring together the world’s leading professional cloud with the world’s leading professional network.” Cloud and networks are two terms used in the official and journalistic analysis of this acquisition which will occupy its board for the next six months. LinkedIn had already encouraging numbers, a company in the health significantly, which, however, lacked a number of too important assets to capture the market and especially revenue up to expectations. This union between two platforms that use completely different technologies has two immediate objectives: lead the correlation between LinkedIn and Office 365 ; accelerate the monetization of new services connected to LinkedIn to Microsoft products.

Numbers

Microsoft LinkedIn is primarily a company with positive numbers: + 60% of mobile traffic in ‘ last year, 433 million users in more than 200 countries around the world, 3 billion of revenue in 2015. Yet all this is not smart enough for a professional network, Microsoft thinks we can invest in dynamic terms, however, as already done in the past Rates with the connection of Cortana and other compatibility. First steps of a business intelligence with a call to users, their engagement, much higher in a $ 315 billion TAM (total addressable market). Exactly as? Something of this scenario, which will cover Europe, has already been leaked in 4 voices webcast (Nadella, Jeff Weiner, Amy Hood and Brad Smith), even if you are limited mainly to the public presentation slide.

So Microsoft summed up in his statement the acquisition LinkedIn strategic value: Redmond regards the Platform as the other side, social, the professional world of the connection program. Obviously, many of the 433 million LinkedIn users are among the one billion people who use Microsoft productivity software, then the logic is to scale and create an environment potential of cloud tools dissemination for the professional and on the other hand value network for Microsoft users.

Cloud multiple networks

The principle that led to this acquisition record is overall easy to understand: a leading software productivity has bought a leading professional network. The cloud has bought the company, the tools for people should merge more easily with users of those tools with the largest market value. So Nadella commented to journalists from around the world live:

It has to do with a single market, targhettizzabile, circular idea of ​​the use of technology, and especially with the Microsoft core.

What does the Microsoft CEO to “circular”? This diagram explains it well:

right given in the right time, one click away is the panacea of ​​all the cumbersome integration between the private and the professional profile. To be honest, Facebook has failed, at least so far, to conquer companies like work environment, while LinkedIn yes . This occasion, however, has not yet been exploited to provide a unified experience. Microsoft wants to create a platform where The LinkedIn account becomes the privileged entrance (and analyzed) to work on their own professional identity with Microsoft’s cloud tools. This environment will also become much more algorithmic . According to Microsoft and LinkedIn, right now the news feed is regulated according to a principle in inefficient silos. The LinkedIn news feed will change , will constantly be cut to shape to the user, just as with Facebook. Everyone will see mostly matching content to activities and interests.

In addition, Nadella Office 365 cites as the key to reinvent productivity processes inside the Microsoft-platform LinkedIn:

the people seek and find jobs, build skills, sell their work and eventually succeed in a connected world. This requires a vibrant network that brings together information from a professional, public LinkedIn, with the information in Office 365 and Dynamics. This combination will enable new experiences, a LinkedIn newsfeed that provides project based on the items that you are working and suggesting an expert to connect; because these experiences become smarter, the relationship between Office 365 and LinkedIn will grow and in turn will create new monetization opportunities through individual and collective subscriptions, targeted advertising.

Marketing

In this scenario of course it is also very important to establish how they could increase revenue so as to convince investors of the goodness of this huge outlay of Redmond. The new unified platform should provide new opportunities for selling and marketing. First, LinkedIn will be able to provide insight to the next level thanks to the marriage of two very large catchment areas. The second, less immediate, is that the same companies can leverage data to LinkedIn updated with Microsoft’s business intelligence to evaluating the quality of its employees or consultants, their relationships, progress their jobs, their degree of collaboration with peers. All data that will be sold. And this triggered the theme of privacy , which Microsoft solves separating public activities from the user’s private data: the first are driven by the system, the latter are protected. It aims to share data in an occupation because you are sure that this creates value for all, user, company, the property.

The Microsoft-LinkedIn floor at a glance

• Microsoft acquires a rich database of professionals.
• LinkedIn expands its dock on Microsoft field (433 million against a billion).
• Microsoft provides algorithms for news Feed, analytical infrastructure, cloud for productivity software.
• LinkedIn opens to the unification with Microsoft products and creates the conditions for unpublished formulas premium users (social learning, digital transformation.)
• the platform reinforces the development of API.