LinkedIn is a jolly useful product in terms of information about individuals – although, in the UK, seemingly populated by CEOs and MDs without a company to their name, who mostly seem to live in Surrey – but, like Twitter, it’s found monetising its reach difficult.
Microsoft, which still makes buckets of money out of its Windows software although it no longer has the monopoly it once enjoyed – has a terrible record with acquisitions and diversifications. It’s done well in gaming with Xbox – at least in terms of market share – but most of its other ventures, from Bing to pricey acquisitions Skype and Nokia, have proved bummers.
Why should LinkedIn prove any different? At $26.2bn it’s a massive bet by newish CEO Satya Nadella who we all thought was more sensible than manic predecessor Steve Ballmer.
Microsoft is, essentially, a B2B business even though lots of individual consumers use its products. The same applies to Linked-In.
Here’s what Julie Langley of ad and tech M&A firm Results International thinks about the buy.
“Microsoft’s core business is built around enterprise productivity software. They’ve been increasingly under threat from all sorts of players competing for pole position in this space.
Google and Facebook, two of the biggest tech companies in the world with strong consumer propositions have moved heavily into this enterprise area, with Facebook at Work and Google for Work.
Doing nothing was not an option for Microsoft, hence this massive, bold coup.
LinkedIn is one of the best new business/sales tools in the world of B2B and in many ways competes head on with Salesforce. When Microsoft integrates LinkedIn with its CRM suite, Dynamics, what you have is a hugely powerful tool that is truly differentiated and one that poses a real threat to Salesforce.”
No doubt she’s right. But products have a strange way of becoming more lumpy and less user friendly once Microsoft gets its mitts on them.