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Microsoft's big bet on LinkedIn not just about data

Matt Kapko | June 16, 2016
The initial shock of Microsoft's massive US$26.2 billion bet on LinkedIn has mostly worn off, but it's still unclear just what Microsoft will do with LinkedIn, how the social network's loyal users will react to related change, and how Microsoft will integrate LinkedIn data with its products.

Microsoft this week reached deep into its coffers and made a massive bet on social media in the enterprise. The company says LinkedIn, which it purchased for $26.2 billion, will be a semi-autonomous entity under its ownership, but LinkedIn data will eventually be integrated with Microsoft's collaboration and productivity tools.

"As Microsoft integrates profiles, preferences and other data more fully, business users will have a more consistent and personalized experience across the suite of Microsoft tools," says Melissa Parrish, vice president and principal analyst at Forrester Research. "A LinkedIn-powered experience could start to look a lot more like a traditional B2C customer experience: smart and personalized." 

LinkedIn will complement Microsoft's Skype for Business, Yammer and other enterprise-focused services, as well, according to Jack Gold, president and principal analyst at J. Gold Associates. The pairing is a "natural fit," and it will help Microsoft sell and expand Office 365 services, he says. "Microsoft buying LinkedIn also is defensive in that it keeps it out of the hands of Google, and allows Microsoft to more effectively compete with Google for the enterprise market where there is far more revenue to be had than in consumer web."

Microsoft buys LinkedIn data — and the platform

Microsoft has multiple motivations for making its largest acquisition since the company was founded 41 years ago, but first and foremost it stands to benefit from the data LinkedIn has on its 433 million users, many of whom are businesspeople. "With deep access to the LinkedIn social graph, Microsoft will be able to power new capabilities for accelerating work and collaboration across an employee's personal connections inside and outside the firm," Parrish says. "More context and better access to content and expertise means fewer emails and meetings and faster results. This will help Microsoft keep Google Apps for Work at bay and fend off challenges from the still-beta Facebook at Work." 

Microsoft's Office Graph — essentially a map of every Office user, the data they share on social media, and how it all relates — in particular should benefit from LinkedIn's "treasure trove of information," according to David Lavenda, vice president of marketing and product strategy at harmon.ie, a Microsoft partner that integrates multiple collaboration tools into a single dashboard. However, Microsoft will have to overcome integration challenges and user concerns about the company owning even more personal information it if hopes to effectively utilize the data, he says. 

"With LinkedIn integration, not only will Office Graph know who is sharing information with whom and about what, but there will also be a layer of information about the individual supplied by LinkedIn that will enrich the recommendations that Office Graph can provide," Lavenda says. Questions about Microsoft's ability to successfully integrate LinkedIn into its infrastructure also exist, particularly in light of its spotty track record and inability to bring Yammer further into the fold, according to Lavenda. Yammer "seems to be slowly dying on the Microsoft vine," he says, and that might not bode well for LinkedIn integration.

 

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