Why Microsoft found LinkedIn so attractive


Microsoft recently embarked on a journey towards making a more full-service product suite, encompassing (nearly) everything businesses need to function. The company did so by purchasing LinkedIn, the world’s largest professional network. A close second on bidding for the LinkedIn purchase was Salesforce. It recently announced its intention to outbid Microsoft had LinkedIn continued conversations with it.

The interest in LinkedIn from both Microsoft and Salesforce confirms not only the need but the demand too for ‘tools’ companies to incorporate networks and content into a single platform. Companies that do so will be most successful in the future, but the integration has to be done strategically. Will Microsoft be able to reshape LinkedIn, combine it with its collaborative tools (Yammer, Skype and Office) and market the redefined product suite to LinkedIn’s massive business network? Or has the corporation bitten off more than it can chew by purchasing a goliath company with no real specialization?

Motivation behind the purchase

To help answer these questions, it is important to examine the goals of both LinkedIn and Microsoft. LinkedIn’s goals are quite obvious. Executives understand that the professional network has reached its potential – even surpassed it. As of late, the quality of contacts within the platform has decreased and the usefulness of relationships has declined. For example, LinkedIn recently discontinued the use of the platform by ‘super-connectors’, users who build a large social network, not for their own benefit, but with the goal of putting people in touch with one another. The reason for super-connector discontinuation is open to speculation. But with 100,000+ connections, how many of those can really be personal?

In a move to provide more utility, LinkedIn purchased Lynda – an online video-based learning company – in April 2015. With this purchase came a new set of challenges. Though video content attracts more attention than text, there is no easy way to engage with Lynda’s videos. Searching for specific clips within the platform also proves difficult. In order to overcome these issues, Lynda now transcribes all video – a time-consuming task that doesn’t bode well for efficiency. Given these challenges and the fact that LinkedIn oversaturated its market, the company needed to hit ‘reset’ – and that’s where Microsoft came in.

As mentioned previously, Microsoft is on a quest to provide businesses with collaborative and operational tools paired with relevant, accessible content that can be utilized within professional networks. Prior to the purchase, Microsoft had a helpful business tool, Office 365. However, the tool was heavily underutilized. Now, with LinkedIn, Microsoft has content and a massive business network – one it can populate with its tools. The strategy of the purchase is sound: integrate tools, network and content into one platform to increase engagement and customer loyalty.

Will it succeed?

In order to make the integration of all components work, Microsoft and LinkedIn have some challenges to overcome…

1. Completing the merger

Microsoft and LinkedIn are two goliath companies with completely different concepts that have attracted different types of users. If Microsoft decides to keep the management teams separate, there will be difficulty in finding synergies and communicating why this newly integrated platform is best for both Microsoft’s and LinkedIn’s user bases.

2. Let’s talk more about synergy

Is LinkedIn’s content and network the best for Microsoft’s pre-existing tools? Probably not. For example, Lynda’s main content – now housed within LinkedIn’s platform – focused mainly on design, and designers love multimedia. However, multimedia content is not a widespread solution to a larger demographic. Both Microsoft’s and LinkedIn’s users come from a variety of professional backgrounds. A designer’s learning and operational tools would likely be different to those of an engineer. A competitor catering to targeted audiences with specific tools and specialized content will likely beat a department store model that features a little bit of everything.

3.  The shifting landscape

The days where user-generated content was offered for free and the value was kept by network-space providers are long gone. The more access readers have to free content, the more value is placed on the best-curated content, especially when important decisions are made based on what is being read. People want to be sure what they’re reading is reputable and that content has been vetted by experts. In order to be successful in providing the best content to keep up with the demand, platforms and members will have to pay for it.

To conclude, as new business and collaborative platforms emerge, those that will be most successful will combine collaborative tools, a vast library of expert-produced content covering specific industry topics and the ability to establish specialized networks around those topics. Microsoft is taking on the challenge of creating this platform by merging LinkedIn’s content and network, but given it and its acquisition’s advanced maturity, the task may be easier achieved by companies starting from scratch.

Marcelino Elosua is founder and chief executive of BlueBottleBiz, the first collaborative learning platform for businesses. Elosua is also chief executive of LID Publishing, which publishes Dialogue.