4 Implications of Microsoft’s Acquisition of LinkedIn
Microsoft’s recent acquisition of LinkedIn has created ripples in the world of technology. The Internet was inundated with articles analyzing the impact of the transaction, valued at 26.2 billion USD. I believe the deal between Microsoft and LinkedIn could have 4 major implications for the corporate world. Let us see what they are.
1. Microsoft could come up with an integrated talent management platform
Microsoft’s purchase of LinkedIn could lead to the integration of LinkedIn, SharePoint, Yammer, and Excel, resulting in the emergence of a comprehensive talent management platform. Matt Charney, in his insightful article, What The Microsoft Acquisition of LinkedIn Means for Recruiting states the platform could offer advanced analytics capabilities which go a long way in making the life of HR professionals easy. Consider the following scenario.
A recruitment executive in a pharmaceutical company is tasked with hiring chemical engineers. The executive runs a search of LinkedIn profiles, and then, presses a button to combine the results of the search with candidates sourced from SharePoint and Yammer in an MS-Excel sheet. He then clicks another button, and a pre-built candidate-evaluation model performs an analysis of the profiles and ranks them based on their suitability.
2. Revenues of Microsoft from advertising could receive a fillip
The purchase of LinkedIn by Microsoft could alter the shape of the search engine advertising market. The acquisition could pave the way for a marriage of the capabilities of Bing and LinkedIn. Janet Driscoll Miller, in her article Microsoft’s LinkedIn acquisition represents huge opportunity for Bing Ads, points out that LinkedIn’s acquisition by Microsoft could provide Bing a unique asset – the social network’s vast reservoir of B2B demographic information. She says this could put existing leaders in B2B search engine advertising such as Google at a major disadvantage. Microsoft could alter its search engine algorithm to leverage LinkedIn’s massive data and transform the search engine into the favorite of corporate advertisers.
3. LinkedIn could help shore Microsoft’s sagging mobile initiatives
Another key area where Microsoft could gain is the mobile market. It is well-known that the company is lagging behind Google and Apple in this vital domain. Microsoft acquired Nokia to increase its “mobile footprint”, but the decision to acquire the Finnish mobile maker ended in a disaster – the Redmond-based software giant had to write off nearly 7.6 billion USD in impairment charges. Ginny Marvin, in her article The Microsoft-LinkedIn Deal: What it means for advertisers, states the purchase of LinkedIn opens doors for Microsoft that efforts such as the Windows Phone and its search advertising partnership with Yahoo failed to provide. With predictions that PCs will account for only 29 percent of Internet traffic by 2010, Microsoft desperately needed to boost its sagging mobile initiatives, and the acquisition of LinkedIn could provide a huge fillip in this aspect.
4. Lynda.com could help Microsoft dominate the e-learning market
Microsoft could use its acquisition of LinkedIn to harness the potential of Lynda.com and become a leading player in the e-learning market. The video-learning platform, which was acquired by LinkedIn in 2015, could aid Microsoft’s efforts to increase its share in the technology-enabled learning market. With the enterprise video market likely to grow at a compound annual growth rate (CAGR) of 16.7% between 2015-20 and touch the 36.84 billion USD mark at the end of the five year period, Microsoft got the timing of the acquisition perfectly right.
Microsoft’s acquisition of LinkedIn could have a profound impact on the business world. It can provide HR managers a comprehensive talent management system. On the marketing front, Bing can emerge the dominant player in the search engine advertising space. The purchase can help Microsoft compete with Google in the mobile arena. The software giant can use Lynda.com to become a key player in the technology-enabled learning domain. What do you think?