Microsoft talks up integration with LinkedIn, but will users care?
Microsoft CEO Satya Nadella went to great lengths to try and justify his decision to shell out $26.2 billion to buy LinkedIn Corp. In a press conference yesterday, and also in a letter to Microsoft staff, Nadella explained that he believes integrating LinkedIn’s database with the company’s products will not only improve their functionality, but also increase sales, while at the same time accelerating LinkedIn’s own stuttering growth.
LinkedIn is struggling in that regard. Even though its revenues continue to grow, the company lost $166 million on $2.9 billion in sales in 2015, and its revenue projections (published in February) for this year were so dire that it lost 43.6 percent of its value, almost $11 billion, in a single day.
Despite this, Nadella seems to think $26 billion is money well spent to get his hands on LinkedIn, with a view to integrating it with specific products like Office 35 and Microsoft Dynamics, its customer relationship management (CRM) platform.
It remains to be seen how successful that strategy will be. Microsoft’s previous effort at integrating a corporate-based social networking platform into its product offerings was less than spectacular. When it first acquired Yammer for $1.2 billion in 2012, Microsoft insisted the site would continue to operate independently. But now the service is fully integrated with Office 365, while Yammer founder David Sacks has long since left Redmond behind, and hardly anyone talks about the platform or the integration anymore.
Microsoft’s motive in buying LinkedIn is that it believes it can enhance its own products using the company’s tools and data, instead of developing new features and functionality off its own back. But this approach has problems, because by integrating two products, as happened with Yammer and Office 365, both products lose their appeal to those who are not users of both.
In his analyst call yesterday, Nadella played up the benefits that will come from having access to the data and “social graphs” of LinkedIn’s 430 million-odd corporate users. But it isn’t immediately clear how Microsoft intends to put that data or those graphs to use, except to try and sell more of its products to them. And even that is a risky move, as it could easily turn more users off rather than turning their heads – after all, who wants to be bombarded with yet more ads?
One way in which LinkedIn’s social graphs might be useful for Office 365 users is that they can enable enhanced collaboration and communication. But then again, wasn’t that what Yammer was supposed to do? It’s hard to see how enhanced collaboration features alone can justify the $26 billion price tag, especially when one considers how weak most LinkedIn users’ social graph connections really are. Lots of users on LinkedIn have lots and lots of connections, but most of them are just that – connections who they hardly ever interact with. And those who do have strong connections on LinkedIn most likely will have already established ways to communicate and collaborate with them anyway.
Writing for PC Mag, Juan Martinez suggests that one of the “amazing” things Microsoft could do is to create new features in Word, Excel and PowerPoint that allow users to “access experts” from LinkedIn’s database. “In addition to seeing synonyms, antonyms, and formatting options, you’ll also be provided with the option to “Find Experts,” or “Message Experts.””, he writes. “Within a few minutes you’ll be able to fire off an S.O.S. to the world’s leading experts for rich context.”
Such a feature might appeal to journalists and a few others, but it’s unlikely to be very useful to the vast majority of Office users who want answers right away, and who will simply ask Google instead. It also sounds like a recipe for lots of unsolicited spammy emails that LinkedIn users probably won’t appreciate.
At the end of the day, most users probably won’t care much about whatever new integrations Microsoft has planned. Few people will stop using LinkedIn just because Microsoft has bought it, even if they dislike Microsoft. And people will always use Office, regardless of what is or isn’t integrated with it. Most people still continued using Skype after all, or at least they did until challengers like Slack came along. Which means Microsoft has a free rein to experiment with as many integrations as it likes, in the hope of coming up with something that’s actually useful. Whether or not it will, only time will tell, but Microsoft’s track record is hardly an inspiring one.
Indeed, Microsoft’s acquisition of LinkedIn is a looking like a rather uninspired deal. Microsoft could potentially derive other benefits – for example, LinkedIn has a rich pool of developer talent within its ranks that Microsoft can tap into, responsible for creating Big Data tools like Apache Kafka and Apache Samsza. But for now, neither company has yet provided a clear idea of what they’re planning to do next, and the only reason people are so excited about this deal is because Microsoft paid such a huge amount of money to make it happen.
Image credit: Microsoft
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