Why Microsoft Bought LinkedIn and What Does It Mean?

Why LinkedIn, which valued its independence, sold everything to Microsoft? And what do we, as users and advertisers, stand to gain from it?

Valued at $26,2 billion, LinkedIn is not cheap. It’s Microsoft’s biggest deal up to date, and also the firm’s CEO first major acquisition (as noted by The Verge). But why does Microsoft wants to have a professional social network?

LinkedIn Will Be the Center of the Professional Hub

Well, anything with 433 million members and 2 million paid subscribers is attractive. And Microsoft, no matter how big it is, didn’t have a social network until now. Having that big user base, the company from Redmond will be able to closely match its own users with its software and services. Nowadays, Office is 1,2 billion people strong.

“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”, said Satya Nadella, Microsoft’s CEO. “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”. Aside from that, social media can be a large source of new leads.

Cortana and LinkedIn Integration Might Be Huge

And that is only the beginning since LinkedIn is to become a central professional profile that will be available within Outlook, Skype, Office, and Windows. As noted by The Verge, Microsoft wants to turn LinkedIn profiles into a central identity. There are even ideas regarding Cortana, Siri-like voice assistant, which could provide context to the people you meet professionally.

Mark Hachman at PCWorld says that Microsoft spent the money to ensure that “you’ll never walk into a meeting unprepared”. Right now, Cortana works similar to Siri. It can tell you some basic information about your calendar, missed calls, e-mails. In the future, it will assist you in a much more complex way, providing you with an intel on your business relationships.

LinkedIn Had a Growth Problem. It Doesn’t Anymore

Back in February, the value of LinkedIn’s shares was slashed, so the deal certainly seems good for them. Microsoft will pay “$196 per share in cash, representing a 50% premium over LinkedIn’s last closing price“.

Quick sidenote: we don't want you to pay a 50% premium over Brand24 subscriptions.

In an e-mail that Microsoft CEO send to the company’s employees, we can find a bit about the LinkedIn’s growth: “we have a significant opportunity to accelerate LinkedIn’s growth and the value it brings to its members with Microsoft’s assets and scale. In fact, when Reid Hoffman, the founder of LinkedIn, and I spoke about the opportunity for us to come together, he called it a ‘re-founding’ moment for LinkedIn and an opportunity to reach the mission the company set out on 13 years ago”.

Structurally, LinkedIn will remain independent. Jeff Weiner will continue to be the CEO of the platform, although he’ll report to Satya Nadela while joining the senior leadership team.

What Does the Acquisition Mean for B2B Advertisers?

The deal instantly positioned Microsoft as a leader in data in the professional world, both organizational and individual. And, as you might expect, we think that a better targeting, more reach and better commercial opportunities (Cortana!) might be the results of said acquisition.

And one more thing… We’ve also searched Reddit for some commentary on the deal. It was a mistake.

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