Microsoft and LinkedIn: One Year Later

One year later, the debate on the merit of the Microsoft and LinkedIn deal seems pointless.  On the other hand, the potential benefit from integrating LinkedIn, the largest professional social media database, into Microsoft, the largest online ecosystem is widely anticipated.  Like any other large technology acquisitions, Microsoft faces the same challenge that:  How to leave LinkedIn to be run as independently as possible, yet reap the synergistic benefit for the parent company Microsoft’s (not LinkedIn) long-term growth and profit?

The first priority and a more long-term challenge for Microsoft is to make sure to motivate LinkedIn CEO Jeff Weiner, one of the most visionary CEOs in Silicon Valley, to stay on longer than 3 years as he agreed.  There are countless (Microsoft) acquisition examples that the acquired company de facto collapsed right after the founders left.   In addition, LinkedIn corporate culture, brand, and identity should stay beyond just a superficial way, such as keeping their own campus and badges.

On the other hand, the product integration should be clearly focused and speed up.   As soon as the deal was announced a year ago, LinkedIn initiated an aggressive endeavor, “20 in 20.” The company picked 20 projects it had planned for the coming 9 months and moved up the deadline, in order to complete them in 20 weeks.   One of the main “motivations” for this approach is to keep the talents motivated after the acquisition.  The most recent specific emphasis is to connect users on the Office Platform and the LinkedIn Platform.  There is clearly tremendous growth potential by combining the #1 professional social media data and #1 global remote accessibility network.

Microsoft should also replicate one of its very few previous successes on LinkedIn from Steve Ballmer’s “One Microsoft” initiative which combines groups with similar functions. For example, Skype was brought in with related Office apps after its acquisition, albeit unpopular at the time. Yet, Microsoft has nearly doubled Skype’s users and moved it into the more lucrative business market.

After all, it will always take time for any marriage to work.  LinkedIn has a similar and in-line financial performance for the last 12 months (after the acquisition) than before.  For Microsoft, LinkedIn now is part of its “Business Product Service,” rather than an independent financial statement.   There is no material impact, yet, on Microsoft’s top line or bottom line.  Experts estimate that the real impact will become visible in next “3 to 5 years.”




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