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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.

Shyam Oza, a senior product manager with AvePoint, a firm that helps enterprises manage Office 365 and Sharepoint deployments, says the greatest opportunity for Microsoft relates to the integration of Microsoft data with LinkedIn's social platform. "While there is a large pool of data available through the LinkedIn acquisition, I think it's the platform that they are most interested in — not the raw information," Oza says. "We underestimate how much telemetry data Microsoft already has from Windows, Office and Skype. They don't need to spend money on data."

LinkedIn data is rich, but largely static

The amount of professional data that LinkedIn has on its users is unparalleled, but the majority of that information is static, according to Manish Sood, CEO of data management company Reltio. LinkedIn has more than 433 million users, but only 24 percent use the site at least once a month, according to a Microsoft press release. "LinkedIn relies on the power of self-curated updates," and as such, the "data does decay due to neglect," Sood says.

"Depending on the need of the individual user and their own level of fastidiousness, updates to profiles may only occur if they are trying to find a new job or have achieved new status, or want to feature new perspectives," Sood says. "This is in stark contrast against true corporate profile data which is continuously renovated and maintained through a steady stream of internal and third party sources." 

The $26.2 billion question: How will all these components fuse together and make their ways into Microsoft products?

"On the face of it this seems a ridiculous amount of money to pay for a company that wasn't exactly in a boom period and which still had a lingering air about it of addressing a market space that was both obvious and not so obvious to anyone tracking it," says Chris Marsh, principal analyst at 451 Research. 

However, LinkedIn represents significant value for Microsoft, particularly in mobile design, social DNA, human resources, marketing and the potential for cross-pollinating Microsoft's collaboration apps with LinkedIn data, according to Marsh. In a report on the acquisition, 451 Research wrote, "By integrating LinkedIn, Microsoft will bring potential features, functionality and benefits to its software that take advantage of the shared infrastructure and connectivity that are unique to cloud offerings, and enable Microsoft's products to benefit from LinkedIn's network effects, which will make it challenging for competitors to match."

 

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