In a swift and decisive move, Microsoft purchased LinkedIn in late 2016 for $26.2 billion. Although few people doubt the usefulness and importance of LinkedIn in the modern economy, many people were puzzled by Microsoft’s massive purchase of the business network and job posting platform.
However, despite that many people were confused about Microsoft’s decision to buy LinkedIn, there was actually some shrewd business behind this move. Considering the major success that Microsoft has had for the last thirty to forty years, few people should be surprised by this. Here is a closer look at why Microsoft acquired LinkedIn, and what this means for the broader digital landscape.
Why Microsoft Bought LinkedIn
First and foremost, LinkedIn is the most popular business social network in the entire world. In fact, it has over 500 million registered users. So acquiring LinkedIn allows Microsoft to become a key player in the social media industry, something it had previously failed to do.
Owning LinkedIn also gives Microsoft access to very beneficial user data. Further, it lets Microsoft upsell Microsoft products to companies who are recruiting and adding additional staff. Many of these companies are right in the target demographic for Microsoft, and selling to them during the hiring phase can help to generate more sales for Microsoft.
Further, Microsoft will be able to use the LinkedIn user data to help boost its Dynamics business software product. It can also use this data for its new product: Microsoft Relationship Sales. This product will help to compete with SalesForce, which is a leader in the business sales software category.
Significance of the Microsoft/LinkedIn Merger
Microsoft’s purchase of LinkedIn means that it will be able to add yet another highly significant communication platform to its portfolio. It already owns both Yammer and Skype. Microsoft’s purchasing of all of these companies has positioned it very well in the digital communication space.
It also means that Microsoft will be able to optimize the LinkedIn platform and help to make it possible for users to have a “universal resume” that can be easily uploaded by users and accessed by clients.
Essentially Microsoft’s acquisition of LinkedIn means that digital job seeking could get better for job seekers, recruiters, and for companies. Not only can Microsoft optimize the LinkedIn platform, but it can also help to integrate its own software on the platform, which could be highly beneficial and increase efficiency.
An evolving partnership
Microsoft’s acquisition of LinkedIn is still very new. So, the full potential of this partnership is yet to be realized. However, Microsoft is a highly innovative and successful company. So it is safe to assume that they will continue to experiment with LinkedIn until they create something that is revolutionary. No company spends $26 billion acquiring another company unless they have big plans for it.
So, in the very near future, job seekers around the world could see some exciting changes on the LinkedIn platform, which could make the job seeking process more convenient, efficient, and exciting.
Unless Microsoft makes a mess of things, there is a very strong potential for it to make a lot of money off of its LinkedIn acquisition. Microsoft’s diversification into communication and social media platforms is helping the company to become more dominant in industries other than its own.
Ultimately time will tell whether or not Microsoft is able to profit substantially from its LinkedIn acquisition. However, due to the fact that there are so many positive aspects of this acquisition, and a strong potential for success, it seems likely that Microsoft will be able to make the most of this deal.