Microsoft signed its largest ever cheque yesterday, acquiring the professional networking platform LinkedIn for $26.2 billion.
According to an email sent out to Microsoft staff by chief executive Satya Nadella, onboarding LinkedIn will allow the software firm to leverage the entire network as a private marketplace for the firm’s goods and services. When looking at things in this way, the price tag starts making more sense.
LinkedIn currently touts a 433 million-strong membership and 106 million monthly active users, culminating in what Nadella has referred to as the “world’s leading professional network”.
High intent targeting
If the deal goes ahead, this business-focused community, whose professional data will be handed firmly over to Microsoft, will be ripe for binding in with the Office 365 brand – ultimately opening up a wealth of new opportunities for a company that’s saturated its existing marketplace.
This combination, adds Satella, will allow for highly-personalised targeting, such as in-feed content based on projects a user is working on, and recommended connections based on providing assistance on a task.
“Think about it: How people find jobs, build skills, sell, market and get work done and ultimately find success requires a connected professional world,” said Nadella.
In the long term, Microsoft would aim to use LinkedIn to build engagement with Office 365, opening the door for more diverse forms of monetisation via subscription services and targeted advertising.
“In essence, we can reinvent ways to make professionals more productive while at the same time reinventing selling, marketing and talent management business processes,” Nadella adds.
Mobile penetration
As well as the vast pools of professional data, buying LinkedIn also packages in a highly engaged mobile audience.
Last year LinkedIn stated that 50% of its users access the network via a mobile device, while 40% of its app users are on the hunt for their next career step.
Those stats alone present Microsoft with a 50 million-strong monthly opportunity among high-intent mobile users; a channel that the company has historically faced some difficulties with.
Whether Microsoft will realise its grand plans to weave the “world’s leading professional cloud with the world’s leading professional network” to create a living, breathing, commercial social community, remains to be seen.
But it’s worth noting that this isn’t the first time Microsoft has tried it’s hand in the social networking space, albeit on a smaller scale. The group acquired business chat service Yammer for $1.2 billion in 2012, which has since lost ground on its competitors.