Requiem for Microsoft’s acquisition of LinkedIn
On April 18, 2016, I did an article on LinkedIn in this column, alluding to its “Facebook for Business” posture, and ending the article with a suggestion that you – the reader – should dig deeper into LinkedIn to see if it’s something for your professional life. Last week, LinkedIn got snatched by Microsoft for […]
On April 18, 2016, I did an article on LinkedIn in this column, alluding to its “Facebook for Business” posture, and ending the article with a suggestion that you – the reader – should dig deeper into LinkedIn to see if it’s something for your professional life. Last week, LinkedIn got snatched by Microsoft for a whopping $26.2 billion. Not bad for struggling LinkedIn. Has Microsoft been had or are there values to be harvested in LinkedIn?
If you use a PC, there’s a high probability that it is powered by Windows, and if you create documents or presentations, chances are that you are paying to Microsoft. So, in a nutshell, what happens to Microsoft should interest you.
Over the years in this column, I have written extensively about how Microsoft had been slow in “getting with the program,” or the high tech things that seem to matter and upon which the near-future of high tech hinges. I mean high tech directions like mobility (smartphones, tablets), social media, cloud, Internet of things (IOT), augmented and virtual reality, etc. It is a fact that for some of these, Microsoft got into the game late, resting on its PC and Microsoft Office laurels, as a sure gate to the future. Dragging its feet killed Blackberry, but Microsoft is much too critical to our daily professional lives to die the way of Blackberry.
By the time that Microsoft started to “get with the program,” it was too late for a few of the initiatives, such as mobility. To leapfrog on mobility, Microsoft acquired Nokia handset division, but this went burst – failed, that is – and Microsoft had to write off $9.4 billion in the wake of the failed Nokia acquisition. Thus, even though the popular media likes to blame Steve Ballmer, the CEO of Microsoft before Satya Nadella, the current one, for not being aggressive enough to steer Microsoft in the future-relevant high tech directions, I think Mr. Ballmer actually tried. Nokia acquisition was strategic, even though it did not work out for Microsoft eventually. Mr. Ballmer had also acknowledged the strategic advantage of a social-media component in Microsoft’s portfolio. I guess that was why he courted Facebook with the intention of acquiring it, even allegedly offering something in the neighborhood of $16 billion. However, Facebook CEO, Mark Zuckerberg was reported to have balked at the idea, intending to see his company through. Great decision by Facebook in hindsight: the company is now valued at $ 320 billion – on paper at least – at par with Microsoft’s own $344 billion.
The acquisition of Skype was also done to bolster Microsoft’s social-media portfolio. Skype is still alive, and is extremely useful to some, although I am not sure how much money it is bringing to Microsoft. Microsoft under Ballmer also targeted the revenue pool from advertising. To bolster its portfolio in this arena, and take a big bite out of Google’s bread-and-butter – advising, that is – Microsoft acquired the company aQuantive for a reported $6 billion. Somehow, somehow, again, Microsoft’s objective in this was not realized, adding to the list of Microsoft’s acquisitions that failed.
Thus, many of Microsoft’s acquisitions of the past were actually quite strategic, even if they didn’t pan out in the end. Could Microsoft’s problem then have hinged on properly integrating the acquired entities into the company’s organizational machinery? If so, how will the acquisition of LinkedIn be different? It might just be that LinkedIn will be easier to integrate into Microsoft. After all, Microsoft is the ultimate purveyor of business productivity tools, and LinkedIn caters to the same business professionals. This is theory. In practice, it could be an extremely different story – some struggles and eventual failure. What will Microsoft find when it gets into the organs of LinkedIn? How well will the two CEO’s synch and how will corporate management be positively reinforced? These, I mean, are some of the differences between “potential” and “reality.”
So, is this a match made in heaven, or do I really think that the acquisition of LinkedIn will improve the lot of Microsoft? I am afraid, I don’t think so! While I can list several ways in which LinkedIn can be successfully integrated with Cortana, Excel, Microsoft Dynamics, Microsoft Word, Skype, etc., the value to the customer – who is by the way a professional – may not actually be there, and I think the acquisition may just end up being a colossal waste of money. Why? Simply because when I use Microsoft Word to create a document I do not want distractions of any sort, and certainly not of the sort that a link with the data in LinkedIn will provide. Ditto for PowerPoint, Excel, and so on. To me, it seems like Requiem for Another Microsoft Acquisition! Eventually, LinkedIn will strategically exist as a social media platform under Microsoft. Forget it’s being able to add values to our clean, much-cherished productivity tools.