The software giant announced a $26.2bn deal to buy world’s biggest business social network LinkedIn, the most significat deal in the company’s 41-year history.
It’s the first major acquisition for Microsoft CEO Satya Nadella’s. The success or failure of the upcoming deal will define him as the leader of Microsoft’s increasingly service-driven future. While many are surprised at the cash figure, the question everyone would like to know, why does Microsoft want LinkedIn?
Nadella’s issued an internal memo which basically outlines what stand behind this decision. Microsoft Chief Executive Offices explained that LinkedIn is “how people find jobs, build skills, sell, market and get work done.”
This social network has become one of the most essential tools in the professional work space, with 433 million members and more than 2 million paid subscribers.
By the way, Microsoft itself has more than 1.2 billion Office users, while it doesn’t feature any social graph, relying on Facebook, LinkedIn, and others to provide that key connection.
LinkedIn provides the world’s tech giant with immediate access to millions of members and a solid social graph that is matched closely with the software and services Microsoft provides. Currently most adults in the US use LinkedIn for finding jobs, keeping in touch with colleagues and establishing business connections.
“This combination will make it possible for new experiences such as a LinkedIn newsfeed that serves up articles based on the project you are working on and Office suggesting an expert to connect with via LinkedIn to help with a task you’re trying to complete,” says Nadella.
“As these experiences get more intelligent and delightful, the LinkedIn and Office 365 engagement will grow. And in turn, new opportunities will be created for monetization through individual and organization subscriptions and targeted advertising,” he adds.
Picture a typical business trip: a busy day with lots of scheduled meeting, drinks at night. A good salesperson knows his or her contacts before he or she steps foot in the door. But that goes for coworkers as well: How you you make them feel comfortable? How do you make them part of a team? How do you let them know who to approach, both inside and outside the company?
All these issues need a helpful assistant. And that’s the time when Microsoft steps in, providing its digital assistant, Cortana, and Office 365.
Right now, Cortana offers 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. Microsoft hopes to teach its virtual assistant to know both about your business relationship and personal info. It sounds smarmy, but a good salesperson will tell you that an emotional connection helps seal the deal.
If the thought of Microsoft owning more data about you—well, you probably should go delete your LinkedIn profile, now. Microsoft already knows your calendar (Outlook), your meetings (Outlook), your coworkers (Delve) your accounts (Microsoft Dynamics CRM) and some of your expertise (Delve). Microsoft calls this the Office Graph.
Jeff Weiner, LinkedIn CEO, said that his company envisions a so-called “Economic Graph,” a digital representation of every employee and their resume, a digital record of every job that’s available, as well as every job and even every digital skill necessary to win those jobs.
The social net also has Lynda.com, a training network designed for e-learning. And, of course, there’s the LinkedIn news feed, where you can keep tabs on your coworkers from a social perspective, as well.
Buying LinkedIn brings those two graphs together and gives Microsoft more data to feed into its machine learning and business intelligence processes. “If you connect these two graphs, this is where the magic happens, where digital work is concerned,” Nadella summs up.