Microsoft buys LinkedIn for $ 26.2 billion. Why?

Yesterday it became known that Microsoft had reached an agreement with the social network Linkedin for buying it for $ 26.2 billion. This is about 30% of the cash that Microsoft now has at its disposal. Such a high price is due to the fact that the social network is in an active stage of development and brings profit to its owners. Incidentally, this is the first major take-over committed by Microsoft since the arrival of the company’s head, Satya Nadella. If something goes wrong, it is possible that Nadella will have to leave his post.

The head of the company sent Microsoft a detailed letter explaining the need to purchase LinkedIn. In particular, Nadella says that the acquired social network is a key tool for professionals, with 433 million community members. LinkedIn also has over 2 million subscribers to paid services provided by the resource. Microsoft has about 1.2 billion Office subscribers, but there is no direct connection with them. In order to improve existing services and create new corporations, we need the necessary information about human resources in the labor market. Now the company will receive this data, and will be able to create new business-oriented products.


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LinkedIn provides Microsoft with access to 433 million of its users and a social graph, elements of which are vacancies, colleagues, training, prospects and recruiting. The main elements of the Microsoft graph are contacts, messages, calendar events and documents.



By combining both graphs, Microsoft can make the work of its subscribers more convenient and efficient. For example, a manager who makes a project plan in Office can get information about a colleague who is working on about the same task. If desired, both professionals can be contacted on LinkedIn. In other words, the corporation plans to add professional interests targeting for its services. Some time after LinkedIn acquisition, this social network and Office 365 will be closely linked. And this is only a small part of the company's plans for the future social network. At the same time LinkedIn will remain an independent brand.



LinkedIn will be a single thread through Outlook, Skype, Office and Windows itself. A LinkedIn user profile will be the center of all Microsoft applications and services. Representatives of various companies will be connected by general meetings, notes, e-mail messages. According to the company, this will help professionals in different fields to work more efficiently. This applies to sales, management, marketing.

LinkedIn will be connected and voice assistant Cortana, which will help track the professional connections between individuals. The company, however, will have to solve the problem with spam, which has long been bothering users of the social network, as well as reliably protect user profiles. Not so long ago, a large amount of LinkedIn user data flowed into the network.



As far as can be judged, the company did not lose with the purchase. So, for example, Google has been trying for a long time (or trying to) to create its own social network, Google+. User profiles of various services of the company automatically become part of this social network. But it cannot be called successful, despite the fact that some of the users of this social sphere are talking. Facebook is completely different. A huge advantage of LinkedIn is that this social network is professional and designed to work, so Microsoft gets several hundred million potential users of its corporate services. By the way, Bing, the Microsoft search service, may well be the “best search engine for professionals.” And Lynda.com will organically complement the direction of the corporation's work on certification and training of specialists in a number of its products. Probably, Microsoft will gradually integrate Office 365 (its corporate component) and LinkedIn. Additional profits can be extracted by creating paid buns and services. Microsoft is good at making money (not at all services, of course). And you might think that LinkedIn is no exception.

Redmond has yet to convince its users to work with their own services, and not to use Facebook at Work or Google Apps. There is a long job to integrate LinkedIn with all the services of the company. The company has a good experience in such integration - for example, Skype, bought by Microsoft in 2011, has long been a part of all services of the corporation. Of course, LinkedIn is a special resource, so the buyer will have to try to make the integration go seamlessly and smoothly for users, both Microsoft users and LinkedIn professionals.

Some analysts have expressed doubts about the success of LinkedIn under the wing of Microsoft. But here it is worth remembering that the company's products and its new acquisition are corporate services. And as a corporate service, which is one of Microsoft’s products, LinkedIn can easily “shoot”, taking a serious market share.