Microsoft Buys LinkedIn for Billions in Pursuit of Big Data
You might have heard that Microsoft recently acquired LinkedIn, the social media platform that centers on business connections and networking. The deal cost the major tech company a staggering $26.2 billion, and shares have skyrocketed since the transaction went through.
Though the social network will likely be a profitable entity for Microsoft, many were surprised by the price tag. As it turns out, it’s all about big data, which the Seattle tech company apparently believes is worth far more than anything else at this point.
LinkedIn and Microsoft Push for More Accessible Data
Even given the stupendous price tag, Microsoft is keeping LinkedIn as a separate entity. It will remain largely the same, with current CEO Jeff Weiner remaining in control. He will just report his dealings to Microsoft CEO Satya Nadella and work with him to develop changes that both entities can agree on.
Basically, Microsoft purchased LinkedIn because of its impressive social networking uses and ability to gather big data. LinkedIn is currently one of the world’s largest sites for networking and job searches. It has more than 400 million users, and Microsoft now has direct access to its audience and all the data those clients create.
Microsoft is also aiming to improve business insights for LinkedIn as well. Together, the two entities will push for more accessible data for businesses of all sizes. There’s plenty of software that can deliver application of data already, but the tech giant is looking to expand these efforts and level the playing field for small businesses.
Improvement in Cloud Services is Also on the Way
Nadella specifically mentioned in an open letter to employees that improved cloud services was a critical factor in the acquisition. Microsoft is planning to use the purchased data to grow Office 365 commercial and Dynamics, as well as many of its other software entities.
“This deal brings together the world’s leading professional cloud with the world’s leading professional network,” Nadella wrote. “I have been learning about LinkedIn for some time while also reflecting on how networks can truly differentiate cloud services.”
The Microsoft leader is optimistic that the deal will help both brands grow in their prospective ways and lead to more complex tandem projects in the future. It’s hopeful that the data can make Microsoft’s cloud services even better as it races competition such as Apple and Google for the top spot in cloud service.
“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,” Nadella wrote.
“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.”
Possible Advancements
Nadella discussed several potential developments that could result from the new partnership. Primarily, he broached the use of video-conferencing for LinkedIn, which will enable job candidates to interview with employers face to face.
In addition, the company plans to work with Lynda.com, a company that specializes in teaching software classes online. Lynda.com is another acquisition by Microsoft, and it could be used to help job candidates improve their skills and make themselves more marketable.
“LinkedIn’s data on jobs, skills, organizational structures, regional trends, educational institutions and other areas relevant to business is a unique asset that provides nearly limitless opportunity to add value to CRM, HR and marketing applications,” says Ed Maguire of CLSA. “LinkedIn’s applied big data expertise in marketing, recruiting and advertising complements and deepens Microsoft’s AI/machine learning and data warehousing reach for the company’s operations itself and for customers.”