Why has Microsoft bought LinkedIn?

Why has Microsoft bought LinkedIn?

Reading Time: 2 minutes1st January 2017 | Modified: 19th December 2022

Categories: CNC News

Microsoft’s purchase of LinkedIn has left many people scratching their heads in bewilderment. Where does this acquisition fit into Microsoft’s long-term strategy?

The price paid was $26.2 billion – a huge price which Microsoft clearly believes good value because LinkedIn now has 433 million members worldwide and more than 100 million are actively using the service every month.

Like its acquisition of Skype five years ago, Microsoft views LinkedIn’s purchase as another key step in its plan to become an essential provider of cloud-based services to businesses worldwide. Its CEO, Satya Nadella, says it’s aiming to juxtapose Microsoft’s own “corporate graph” with LinkedIn’s “professional graph” meaning the interconnected relationships between people and companies.

New experiences

The idea is that new experiences would be available to business people to help their companies be more successful. For example, a LinkedIn newsfeed might suggest articles you could read about a specific subject and Office 365 may simultaneously suggest an expert to connect with.

The question is: where will such experts come from? A set of Microsoft-approved suppliers perhaps? Microsoft gold partners maybe? The risk is that independence and objectivity when choosing IT services may be diminished.

Gary Jowett from Computer & Network Consultants in Brighton says: “If LinkedIn is turned into little more than a thinly-veiled marketing tool for Microsoft to promote its services this will surely alienate more users than it attracts. So we will have to wait and see if it retains its independence. If it doesn’t, that could damage its reputation and reduce its value as an effective networking platform for the millions of people who currently use it worldwide.”

Collaboration and CRM

Some industry analysts claim that salespeople already use LinkedIn for pursuing new business opportunities. And if close links can be forged between LinkedIn and Microsoft’s latest collaboration tools and customer relationship management (CRM) applications, this could be a winning combination.

However, sceptics point to unsuccessful integrations in the past – such as Microsoft’s purchase of Nokia. Such failures are sufficient evidence that the price paid for LinkedIn may not yield the return that’s hoped for.

Gary adds: “It’s highly unlikely Microsoft will leave LinkedIn entirely independent as it seeks to gain some extra value from having it in the same group of companies. So it’s more important than ever that companies in the South East seek independent advice about the best IT tools and applications for their businesses rather than relying on what appears at first to be helpful advice from a new connection they have on LinkedIn.”

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By Gary

Gary has always focused on making sure the most appropriate solution is provided to help customers, not just what's new and shiny. With over 30 years in the IT industry Gary has the experience to tell the difference between something that's game-changing or is just a passing fad!