Huge news today: Microsoft is buying LinkedIn, the social networking site for business professionals.
Is this a good deal for Microsoft? And what could this mean for your social media marketing strategy?
Here are five things you need to know about this big tech acquisition.
1. What’s The Deal With Microsoft Acquiring LinkedIn?
Microsoft announced today that is will acquire LinkedIn, which has more than 433 million members (about 105 million of those are active monthly users, and 2 million are paid subscribers), for a whopping $26.2 billion in cash. Jeff Weiner will remain CEO of LinkedIn, reporting to Microsoft CEO Satya Nadella.
A couple more stats of note: LinkedIn had 45 billion page views in the last quarter, and more than 60 percent of its traffic is mobile.
Rumors began circulating about this deal in April. At the time, StreetInsider.com noted:
For LinkedIn, the stock has been languishing and analysts view the company at a ‘crossroads’ with slowing enterprise and online talent solutions growth and rising investment. Meanwhile, Microsoft lacks much of a social media presence and would likely be attracted to LinkedIn’s bubbling database of business users.
Pending final approval from shareholders and regulatory review, the deal should be done before the end of this year.
2. Why Is LinkedIn Selling Now?
LinkedIn CEO Jeff Weiner shared an email he sent to employees today:
“When Satya first proposed the idea of acquiring LinkedIn, he said it was absolutely essential that we had alignment on two things: Purpose and structure. On the former, it didn’t take long before the two of us realized we had virtually identical mission statements. For LinkedIn, it was to connect the world’s professionals to make them more productive and successful, and for Microsoft it was to empower every individual and organization in the world to achieve more. Essentially, we’re both trying to do the same thing but coming at it from two different places: For LinkedIn, it’s the professional network, and for Microsoft, the professional cloud.
Both of us recognized that combining these assets would be unique and had the potential to unlock some enormous opportunities.”
3. Is This Deal Good Or Bad For Microsoft?
Cleary, Microsoft is making a huge bid here to put itself front and center in the life of every business professional.
This is a great business move for Microsoft, according to Jasmine Sandler, CEO of Agent-cy Online Marketing, a B2B social media marketing agency and training business.
“They are taking on a company that is the leader in B2B social networking and has an embedded user base (for any Microsoft products) of over 433 million captive global business professionals,” Sandler said. “The M&A makes a ton of sense in that they have common customers and can both expand their offerings and value to them.”
The combination of Microsoft’s and LinkedIn’s graphs show the complementary nature of this deal, which Microsoft says will create “more connected, intelligent and productive experiences”:
However, count Larry Kim, CTO and founder of search marketing SaaS company WordStream, as one who believes Microsoft overpaid.
“LinkedIn is essentially (1) recruiting platform for HR professionals (2) a sales prospecting tool for enterprise sales reps (3) a place to publish your resume online (4) a place to upload SlideShares and blog posts (5) a mediocre ad network,” he said. “I’m not sure why this is worth $26 billion to Microsoft.”
4. Is This Deal Good Or Bad For LinkedIn?
Microsoft highlighted several opportunities to grow LinkedIn, such as creating a unified professional profile, an “intelligent” newsfeed to keep members connected, and turning Cortana into your professional digital assistant.
“The acquisition is definitely a boon for LinkedIn because Microsoft can help grow LinkedIn faster,” said Lee Odden, CEO of TopRank Marketing. “LinkedIn will retain its brand, culture and independence with Jeff Weiner remaining as CEO and I think that will be important.”
Sandler said this merger cements LinkedIn as a leader in services and products in the business networking space.
“Many social networks have tried and are trying to compete and beat LinkedIn,” Sandler said. “Facebook at Work is a perfect example, never mind the millions of wannabe LinkedIn startups out there.”
Erik Qualman, a best-selling author who will soon release his next book “How to Sell on LinkedIn”, said he was shocked and a little disappointed by this move because LinkedIn has so much more room to grow:
“I’m concerned about why LinkedIn felt compelled to sell – is there something the executives see that will limit their growth?” Qualman said. “From the surface they still had a ton of room to grow internationally (they aren’t blocked in China), get more blue-collar workers on the platform, and they have the entire high school and university play (lowering the age limit to 13).
“In my mind, LinkedIn is still the world’s greatest selling tool,” he added. “As a lover of social media is sad to see one of the pillars get gobbled up.”
However, according to Kim, this is the best possible outcome for LinkedIn.
“The company was struggling in a lot of areas like competition from other social media networks, and even just general confusion over what they wanted to become,” Kim said.
5. How Could This Acquisition Impact Marketers?
Overall, Odden said he thinks the promise of helping individuals to become more productive, and increase skills and connections – along with greater opportunities for sales and marketing – is pretty compelling.
“I think the combination of Microsoft, especially Office 365 and Dynamics with LinkedIn’s network will create opportunities for companies and marketers on several levels. Empowering individual professionals with customized news, learning and access to relevant professionals to increased advertising options and sales through Dynamics CRM and LinkedIn Sales Navigator are a great start.
“I’ve always wanted to see LinkedIn expand to a professional CRM and with Dynamics I think we’ll finally see that,” he added. “From general networking to finding subject matter experts based on what you’re working on to connecting with internal and external influencers, there are many benefits to a LinkedIn CRM integration.
Sandler agreed. For LinkedIn marketers, this acquisition could mean amazing opportunities to reach and engage your target audience.
“Marketing, advertising, and sales relationship development can occur now across all Microsoft products potentially – Outlook, Calendar, Active Directory, Office, Windows, Skype, Dynamics, Cortana, and Bing,” Sandler said. “By expanding where the customer can be reached and certainly the volume of customers (over 1 billion Microsoft users across all products), marketers can reach more potential customers at every point of customer communication and business action.”
Despite all the potential in the world, LinkedIn could fail under Microsoft. Remember Yammer? If not, you aren’t alone.
“There’s a risk that products slowly fade away after being acquired,” Kim said. “If you were investing in LinkedIn as a social network for marketing purposes consider diversifying to other platforms like Facebook and Medium.”
Featured image created via Photoshop from Microsoft press release images.