Monday brought an announcement that Microsoft acquired LinkedIn for a $196 per share in an all-cash transaction valued at $26.2 billion that set social media sites a flutter with the question: Why did Microsoft do it?
For many the announcement offered a timely reminder of the insane valuations of tech companies that are not even making a profit.
Meanwhile, others labeled this latest acquisition nothing but a vanity buy. Objectively, this acquisition makes perfect sense. Both parties have aligned motives and are intent on creating a global network of professionals. LinkedIn is THE global network of professionals.LinkedIn has over 7 million active job listings, with 433 million members across 200 countries supported by the education company Lynda.com, which offers training services to corporate customers. It’s the full package. Therefore, it’s easy to see the appeal for Microsoft, especially given its recent corporate maneuvers and past disappointments.
Microsoft acquired Yammer and Skype, with little success, and they underperformed with Nokia. But it seems this recent move is part of a broader strategy to compete on the online, digital battlefield by leveraging and adding all the collaborative potentials of Office 365. Just last week Microsoft added yet another app called Planner, which is Microsoft’s answer to Trello. Planner compliments a number of integrated collaboration tools such as Office Sway and Office Delve. The addition of LinkedIn to this suite of tools opens up exciting possibilities. And it indicates that Microsoft finally got the message!
Imagine working on a complex project nurtured by an algorithm that feeds you helpful articles automatically. Perhaps the algorithm can even connect you to helpful talent. You could build a professional team around a single project in no time. Let’s say you then realize that you need additional training. Microsoft could make it available on the Office portal. Even job interviews could take place directly through a Skype plugin.
This latest deal suggests it won’t be long until we find ourselves hyper-connected through a number of platforms and companies. This move could spark a new wave of mergers and acquisitions. Some companies that come to mind are Apple, Google, and Twitter. Apple and Google have significant cash reserves. Twitter is looking vulnerable, with its monthly 310 million users and crippled grow rate.
That’s all well for the companies, but what about the users?
There are growing concerns that our personal data is changing hands too many times, and that too little security is in place to protect our privacy. Large organizations continue to grab as much data as they can. Acquisitions like this only increase their data coiffeurs, putting them in a powerful position to sell that data to the highest bidder. Given how much this narrative has circulated in media outlets and social media channels, it’s only a matter of time before new measures are installed to prevent the exploitation of personal data for financial gain.
Whatever befalls our data and us, it’s clear that this acquisition will catapult Microsoft into untapped areas. Whether the succeed is another story for another article.