Microsoft move to acquire LinkedIn is a better move than past buyouts, It provides a stronger enterprise social platform to integrate Microsoft cloud and office productivity. It gives LinkedIn a better roadmap for shareholders in the long run as competition for the digital workforce grows between the big cloud players
Microsoft's interest in acquiring LinkedIn
Microsoft acquisition of LinkedIn makes sense in Microsoft's link with Enterprise in its Cloud platform and portfolio of enterprise business services.
To that extent it is a good acquisition strategy for Microsoft perspective to build out its enterprise services capabilities.
LinkedIN has been underperforming in the market in the eyes of stock analysts certainly on the last 12 months and since 2011 floatation on the stock exchange.
LinkedIN in the last few years has actually starting losing customers and its share price had dramatically fallen over 40% in recent quarters.
LinkedIN user base of 106 million active users by 2016 compared to 310 million twitter active user and the mighty 1.65 billion active facebook monthly users had
never managed to increasing its commercial services in what could have been a strong enterprise market.
How can the two companies combined boost a business that has been growing it's
Microsoft can exploit this acquisition in several ways. It is not just the 106 million activity user base but more in is the professional networking the LinkedIN site manages that could be integrated with Microsoft office productivity tools and in Microsoft CRM products to grow its enterprise portfolio of services.
It will be interesting to see it Microsoft will integrate this into their Office products or to extend its earlier smaller business social network Yammer platform acquisition and over the internet video and voice calls of skype. A more significant strategy is to bring LinkedIN into the Microsoft Dynamics CRM to provide a strong enterprise selling and social integration with its customer management. This is a logical response to competitors such as Salesforce.com and workaday in human resource management who have realised the importance and rise of social network collaboration in modern connected enterprises.
What is more likely it the growing use of social media and digital tools that are increasingly defining the "digital workforce" that will be defined by always-connected employees and subcontractors with company and on-the-go services on the mobile apps. The role of "talent management" is becoming increasingly critical to enterprises as employees and perspectives new staff productivity will be through human resources platforms that can bridge the commercial world of work activities and the knowledge sharing and collaboration that defines modern digital economy.
How will Microsoft restore LinkedIN growth ?
LinkedIn makes two-thirds of its income from talent solutions in the recruiting and job market platform services that define LinkedIN and the remainder in selling marketing solutions and premium subscriptions, it has remained the website to go to job networking and professional networking.
The investments in marketing solutions may be absorbed into the Microsoft existing portfolio of services with its Bing and advertising systems. The social business platform links to talent and recruiting will likely be preserved as it’s the main revenue generated representing over two thirds of sales. This will retain the existing activity accounts but it must start to turn this round to growing the user base leverage the Microsoft Cloud clients and infrastructure management to consider increasing its scale to become the enterprise social platform it failed to achieve in its current pre acquisition efforts. The issue of sales leads and development is different to career and talent management but the network of social connections are largely the same to the trick will be if Microsoft and the merged LinkedIN team can figure out how this is integrated into a new digital work platform strategy and product offering.
Microsoft might use the data from LinkedIn.
It will be interesting to see it Microsoft will integrate this into their Office products or to extend its earlier smaller business social network Yammer platform acquisition and over the internet video and voice calls of skype. A more significant strategy is to bring LinkedIn into the Microsoft Dynamics CRM to provide a strong enterprise selling and social integration with its customer management. This is a logical response to competitors such as Salesforce.com and workaday in human resource management who have realized the importance and rise of social network collaboration in modern connected enterprises.
In a longer strategic view it is more likely it the growing use of social media and digital tools that are increasingly defining the "digital workforce" that will be defined by always-connected employees and subcontractors with company and on-the-go services on the mobile apps. The role of "talent management" is becoming increasingly critical to enterprises as employees and perspectives new staff productivity will be through human resources platforms that can bridge the commercial world of work activities and the knowledge sharing and collaboration that defines modern digital economy.
So in terms of using the data from linkedIN it is likely to integrate this into the business social network data LinkedIN has with enterprise productivity tools and more specifically in growing and using the rich business networks of data for extending it CRM reach.
What info about professionals will they be interested in?
It is most likely the personal network , messaging and company groups that will benefit from integrating with the Microsoft office software and its business applications. When we look at competitors such as Salesforce.com in CRM and Workaday in HRM then these products have used social networks to integrated with their sales and workforce to provide what is called “enetrprise social “ platform services. That is, being able to collaborate and share relationship services with potential customers and partners.
What do you think the goals are here?
The goals are predominately to get the enterprise network of 100 million active users in LinkedIN and the business network services to extend Microsoft range of enterprises service, a market that is a core strength.
This will likely involve the investments in marketing solutions may be absorbed into the Microsoft existing portfolio of services with its bing and advertising systems. The social business platform links to talent and recruiting will likely be preserved as it’s the main revenue generated representing over two thirds of sales. This will retain the existing activity accounts but it must start to turn this round to growing the user base leverage the Microsoft Cloud clients and infrastructure management to consider increasing its scale to become the enterprise social platform it failed to achieve in its current pre acquisition efforts. The issue of sales leads and development is different to career and talent management but the network of social connections are largely the same to the trick will be if Microsoft and the merged LinkedIN team can figure out how this is integrated into a new digital work platform strategy and product offering.
Are there risks associated with integrating personal profile information/user data across formerly separate entities?
Yes, it is in the legal consent to make sure that the use of this personal profile data is managed in accordance with the contract terms of service. Microsoft have probably a better reputation in brand image for secure access management but it still requires that the linkedIN users data is protected and used within the terms of use in the LinkedIN user agreement. If this is changed then Microsoft, for example it starts to analyse and market this data this may require something more than just a transfer of user agreement rights in the acquisition but a confirmation of new terms of use by the existing LinkedIn user and Microsoft. I suspect this will be managed to keep this as seamless as possible.
The time ran out for LinkedIn as Microsoft buys for $26 Billion
LinkedIN has found its hard to evolve and grow profitability beyond its core activity of business oriented social networking. Its membership base after reaching a peak in the beginning of 2013 have been falling ever since. Even though its revenues have growth 35% in recent times, its shareprice in the recently years have been indicative of a lack lustre stock performance of a company struggling to define a market model bigger than its social media roots. While facebook has high growth advertising revenue and strong performance, LinkedIN has in some ways been stuck in its enterprise domain of job seekers and career planning.
This has been long in the making with several rumors from stock analyst raising alarm bells of LinkedIN not being able to develop its own new growth commercial strategies. With its net income falling in 2015 falling again year on year from 2011 it has finally come home with the Microsoft acquisition of $26bn in cash.
When we look at the activity users in social media global players, LinkedIN has been a star. It had grown a user base of 106 million active users by 2016 but compared to 310 million twitter active user and the mighty 1.65 billion active facebook monthly users had never managed to grow its commercial services in what could have been a strong enterprise market. Yet historically LinkedIN was one of the earliest starters in the social media revolution, LinkedIN founded in 2002 long before facebook (2004 ) and twitter (founded 2006) has grown its revenue in the business social network niche market over several years going public in 2011.
Looking at the mix of where the revenues come from , LinkedIn makes two thirds of its income from talent solutions in the recruiting and job market platform services that define LinkedIN and the remainder in selling marketing solutions and premium subscriptions, it has remained the web site to go to job networking and professional networking.
Today some stock analyst think Microsoft paid a big sum $196 at a 50% premium for the share price but it makes sense in Microsoft’s link with Enterprise in its Cloud platform and portfolio of enterprise business services. To that extent it is a good acquisition strategy for Microsoft perspective to build out its enterprise services capabilities.
The question is now how will Microsoft utilize this strategic move into a larger enterprise social platform space? It will be interesting to see it Microsoft will integrate this into their Office products or to extend its earlier smaller business social network Jammer platform acquisition and over the internet video and voice calls of skype.
We are now in an era of the “digital workforce”, what is more likely it the growing use of social media and digital tools that are increasingly defining human productivity empowerment that will be defined by always-connected employees and subcontractors with company and on-the-go services on the mobile apps. The role of “talent management” is becoming increasingly critical to enterprises as employees and perspectives new staff productivity will be through human resources platforms that can bridge the commercial world of work activities and the knowledge sharing and collaboration that defines modern digital economy.
Microsoft and LinkedIn
The long held rumors of LinkedIN not being able to develop its own new growth commercial strategies with its net income falling in 2015 falling again year on year from 2011 have finally come home with the Microsoft acquisition of $26bn in cash.
LinkedIN founded in 2002 in the early days of social media long before facebook (2004 ) and twitter (founded 2006) has grown its revenue in the business social network niche market over several years going public in 2011.
It had grown a user base of 106 million active users by 2016 but compared to 310 million twitter active user and the mighty 1.65 billion active facebook monthly users had never managed to grow its commercial services in what could have been a strong enterprise market.
LinkedIn makes two thirds of its income from talent solutions in the recruiting and job market platform services that define LinkedIN and the remainder in selling marketing solutions and premium subscriptions, it has remained the web site to go to job networking and professional networking.
Microsoft’s ten times valuation of LinkedIN company is typical of an acquisition value and makes sense in Microsoft’s link with Enterprise in its Cloud platform and portfolio of enterprise business services.
To that extent it is a good acquisition strategy for Microsoft perspective to build out its enterprise services capabilities.
It will be interesting to see it Microsoft will integrate this into their Office products or to extend its earlier smaller business social network Yammer platform acquisition and over the internet video and voice calls of skype.
What is more likely it the growing use of social media and digital tools that are increasingly defining the “digital workforce” that will be defined by always-connected employees and subcontractors with company and on-the-go services on the mobile apps. The role of “talent management” is becoming increasingly critical to enterprises as employees and perspectives new staff productivity will be through human resources platforms that can bridge the commercial world of work activities and the knowledge sharing and collaboration that defines modern digital economy.