Microsoft has announced its intention to acquire social business platform, LinkedIn, for $26 billion. The huge cash deal – a bubble in its own right – values LinkedIn at $196 a share, or $60 per user. Jeff Weiner will stay onboard as CEO of the network, and report to Microsoft chief Satya Nadella.
As LinkedIn will retain its brand and independence, the huge size of the deal reveals that Microsoft must see the promise of a financial return in each of LinkedIn’s 433 million users, despite the value of LinkedIn’s online ad revenues plummeting this year. And of course, $26 billion buys the data of 433 million people – who gain nothing from being turned into a Microsoft asset.
Worrying for Microsoft must be the fact that only one-quarter of LinkedIn’s members use it monthly. For most it is something to keep ‘topped up’, rather than a core communications tool. However, registered user numbers are rising by about 20 million a quarter – impressive – and the trend has been upward from day one.
In recent months, LinkedIn has improved its interface and expanded into a blogging platform, and offers its premium users a range of business, analytics, and networking tools. So it’s a safe bet that Microsoft plans to expand the network’s functionality still further – as it has done with its other main platforms, turning them into cloud-based application suites.
Given the prevalence of unified communications and collaboration tools within Microsoft’s services, and its shift of emphasis towards enterprise comms in the cloud, a conceivable future for LinkedIn might be as a corporate communications dashboard and collaboration tool. Certainly, the acquisition says that Microsoft’s focus is now on business users, and not on consumers.
Less appealing for the average user would be a future as a noise- and lead-generator for opportunistic marketers – not to mention for the soft-selling of Microsoft products that is a constant presence on its other public-facing platforms. Certainly, LinkedIn is seen by many users as a ‘self-centred’ messaging tool, as much as it is a networking platform. Stand by for a torrent of spam.
And herein lies both the advantage and the risk to the world’s largest software company, and to LinkedIn: Redmond’s deep-rooted tendencies to over-engineer solutions, to replace simplicity with clutter and unwanted functions, and to mistake its own (often clumsy) desire for business advantage for a human-friendly interface.
Goodwill is core to a social network, and Microsoft is very bad at generating it: witness the nagware pushing people towards Windows 10, for example. Online, the only people pushier than Microsoft are spammers and SEO consultants.
Indeed, spending $26 billion represents a special kind of pushiness: it’s money that shouts: “We’re still here. We’re still relevant, even though we’re nowhere in mobile or the consumer space. We can spend $26 billion on buying someone else’s idea and customers.”
But under Nadella, there has at least been a recognition that the “more is more, and louder is better” approach of his predecessor no longer works. Sometimes ‘less’ really is the answer, and complexity is best hidden – especially in a world in which users like to feel in control of their own destinies and technologies.
That is certainly the case on LinkedIn, where users manage their own careers, too. So let’s hope that ‘simple, focused, open, and extensible’ remain the watchwords for LinkedIn, rather than ‘complex, broad, closed, and pushy’.