Microsoft to acquire Linkedin. If you have not already read the news, yesterday Microsoft announced that it was on track to buy LinkedIn later this year. This is causing some upsets in many corners. Why would a Business software & services supplier (Microsoft) buy what most people think as a CV warehouse? Why over pay? If you look at the figured it is clear that Microsoft are paying over the odds per user. In addition is this a copy of many other bad tech purchases over the years or is this genius for Microsoft?
We need to look at where LinkedIn is, and the changes it has made over the last year. In the past LinkedIn has mostly been used by 4 distinct populations:
- People that want to list their CV/ profile
- People that want to network and learn
- People trying to find business customers to sell/ pitch to
The power of the network for the majority is/ was in the group running and membership. behind the scenes sits a lot of very valuable and in the main unused data. data that is worth a lot of money to the right people.
In 2015 LinkedIn started making significant changes to parts of its platform. (see https://rapidbi.com/linkedin-or-linkedout-the-social-game-changer/ ) Mostly to the groups part. The groups have become more limited. Less engaging. More peer led. These changes resulted in the loss of over 1million groups. Yes you read that correctly, over 1 million groups disappeared overnight. More recently in the help part of the site, one of the currently most asked questions appears to be “how do i close my LinkedIn account and profile”. Was this a start to show to Microsoft how LI could “clean house” and make groups more business friendly?
Many thought that LinkedIn was dying
For almost 6 months I have been talking with many people about LinkedIn and the changes. Some of those inside Microsoft about a product that MS have that has hardly grown, but could with minor changes taken the majority of LinkedIn’s business overnight. That product is Yammer.
Microsoft has a strategy of moving all business users to cloud based office 365 includes 2 great pieces of software functionality. These are Skype for Business and Yammer. Yammer for those that don’t know of it can operate a walled garden social network. It can also operate across different domains and companies. Much like Linkedin Groups.
Within 3 years most business users of Microsoft Office would have an account that could access Yammer. If we had a single profile page (much like our page on LinkedIn). This page detailed who we are, what skills we have, along with privacy options:
- Inside employer only
- Publicly available
Imagine the possibilities. A truly cross platform set of data… we controlled.
What does Linkedin bring to Microsoft?
In his blog Mahesh Murthy summarises this neatly:
Google and Facebook can relax. Oracle and SAP shouldn’t
Microsoft could have played the longer game and built its own network and database. It is interesting that in much of the media talk Microsoft seems to be ignoring Yammer. Skype, Outlook etc is mentioned. But not Yammer.
Yammer is not the most elegant of tools. But unlike anything else provides in house security and social business connectivity. This can be synchronous and asynchronous communication. Will parts of LinkedIn’s platform replace Yammer or vice versa?
In reality it’s about just a few things:
- The people focused element of business
- The database
- Data analytics
LinkedIn + Microsoft: Changing the Way the World Works
In his blog on LinkedIn, Jeff Weiner ( https://www.linkedin.com/pulse/linkedin-microsoft-changing-way-world-works-jeff-weiner ) outlines that he will stay as CEO (many will be disappointed given his lack of willingness to listen to LI users in the last 2 years). He also provides a sort of “state of the union” type piece positioning the changing tech environment and impacts on many firms. It’s impact on growth, on job losses etc. A part worth reproducing here is:
“Every day I come to work, I’m primarily guided by two things:
First, realizing our mission and vision. While this has always been top of mind for me, it’s never been more so than now. Remember that dystopian view of the future in which technology displaces millions of people from their jobs? It’s happening. In the last three weeks alone, Foxconn announced it will replace 60,000 factory workers with robots, a former CEO of McDonald’s said given rising wages, the same would happen throughout their franchises, Walmart announced plans to start testing drones in its warehouses, and Elon Musk predicted fully autonomous car technology would arrive within two years. “
End of the line for Sales and HR software?
Much like apps and functions inside Facebook for b2c and games. What if Microsoft harnessed the power of Linkedin profiles and data along with a leading edge CRM platform. What if developers were encouraged to develop AZURE style apps to offer business functionality to an existing database?
Could this move, with clever integration be the sign that Facebook is for the informal world and Microsoft/ LinkedIn is the business environment? With millennials not doing much on facebook as their parents are on it, and the younger generations using Instagram, maybe LinkedIn and Microsoft have a new opportunity to capture a fresh approach?
What about recruitment platforms and environments? How could this merger and integration change the way the suppliers and users of recruitment tools change?
With most firms using Microsoft software somewhere in their business, with 40-60% of the white-collar workforce already registered on LinkedIn. Just think how this could change the recruitment space too.
If so we need to carefully think about what goes on our profiles. Be careful about our connections. Those that connect with anything that breathes may regret those decisions of the past!
As I write this piece, I know that much of my profile has been public for over 12 years. My LinkedIn profile has developed over the years. And yet just a few weeks ago I was approached to do some work for someone, and they wanted me to pretend to be an employee for them. No problems there.. BUT they expected me not to mention if asked that I work as a consultant for others too. This stuff is publically available. Of course in the consulting and freelance world this is known. BUT how will employers react? How will they deal with this closed mindset in an open mindset environment?
When we think of disruptive startups and disruptive technologies we often think of startups. Firms like Instagram, Uber, Kickstarter, Spotify,airbnb, udemy are often developed from different sectors than the ones they impact the most.
Who would have thought the 2 established tech firms, especially “grandad” type firms like Microsoft, would be able to integrate another long standing business (in the tech world) and create something that is so potentially disruptive?
People do not like change – Microsoft acquire LinkedIn
Well not exactly true. People do not like changes imposed on them. This is especially true if they are embedded in the previous way of doing things. Some will hate the idea of LinkedIn being part of Microsoft. Some will think that LI has already lost its way. It will take many of us some time to adjust to the idea, as the changes and integration start to take place some time in 2017. I for one am really excited about the possibilities. This could be the start of some real disruptive approaches to online learning, HR and people management, not to mention recruitment. Firms in the HR and recruitment space will need to innovate. they will need to be agile and quick to respond. they will need to think differently about what they do and how they offer it. Else others will come in.
One thing is for sure, IF (and its a big IF), Microsoft open up the APIs to developers with licenses to access the data, we could see a lot of disruptive change in the next 2-4 years.
The biggest win for the “ordinary person in the street” could be the introduction of the universal CV or Resume, most noteworthy your LinkedIn profile!
What are your thoughts on this news?
Is this good or bad for business?
What do you see are the threats or opportunities?
As the result of this purchase Microsoft could be on to a real disruptive strategy. Done well, this could set the tone for all business software for the future, not integrated and if the integration lacks users engagement it will fail much like the Nokia purchase. Where is Nokia now?