You might have noticed that we at #SMXChat don’t jump on topics in the moment. We like to let things simmer down, let our community think about the impact of events, before we approach ‘current event’ topics. But you had to know that we would get around to the Microsoft acquisition of LinkedIn, and in general, the impact that acquisitions are having and potentially will have on social media.

Sometimes, we imagine, acquisitions by the likes of Facebook, Yahoo!, Twitter, etc. are relegated to the back page of the business section, and reported lightly on social media and marketing blogs. Then, a big one happens, i.e., Microsoft’s planned acquisition of LinkedIn and it gets buzz going again. Does it also send a few quivers of anxiety and worry through the digital marketer community?

The Microsoft purchase is it’s largest acquisition ever. That’s saying something. So what’s the play? Where’s the value in purchasing LinkedIn?

MS Graph-LI Graph
Image Credit: http://www.theverge.com

Well, a New York Times Dealbook piece makes it pretty clear: On one side, there is the massive number of LinkedIn members (estimated at 400 million); the other side is the business process aspect LinkedIn, and the potential for value to be gained in integrating into the Microsoft cloud, and

Using LinkedIn to create a ‘social fabric in the Microsoft cloud, integrating with Outlook, Dynamics, Office, Windows and Skype.’ – Jeff Weiner, LinkedIn CEO

“This deal is all about bringing together the professional cloud and professional network” – Satya Nadella, Microsoft CEO

While collaborating on this topic, we (Ehsan and Mark) came up with similar rationales for the Microsoft-LinkedIn deal. The largest being the integration aspect, which sort of harkens back to the acquisitions of the ’80s and ’90s that strove to fulfill the hopes of ‘vertical integration’ in tech companies like Hewlett-Packard, Dell, Oracle and IBM. Other aspects include:

  • A treasure trove of verified and validate email addresses from LinkedIn that converges Outlook, Hotmail, and LinkedIn profiles for the Dynamics CRM.
  • Strategic information (Content from LinkedIn Pulse) on Executives from thousands of companies with LinkedIn profiles.
  • Real data on businesses and business people – further reinforcing that information and data are becoming the most valuable commodities for business.
  • The almighty dollar. Hello, advertising revenue from paid ads.

“Social Media is a term businesses like to use to get people to do business with them.” – @eksays

  • And, not least, the as yet untapped, unrealised value to be gained from harnessing ‘social signals’ from LinkedIn’s network. We believe that this is the aspect that will bring attention to other social networks (like Twitter.)

“LinkedIn is gold dust when it comes to data & info & as we know information is the most expensive commodity!” – @eksays

These companies are after data. Data, moreover, the analysis and interpretation of data, is of supreme strategic importance.” – @marksalke

Q1) Why do you think Microsoft acquired LinkedIn?

Q2) Many acquisitions seem to cover the ‘media’ aspect of acquired companies. What are the impacts on the ‘social’ aspect?

Q3) What strategy(ies) do you think are behind the acquisition of social media platforms by companies like Microsoft? Are more to come?

Q4) What companies are well positioned in converging business and social strategies? Which are poorly positioned? Why?

Q5) Are members/users ‘out in the cold’ when it comes to capitalising on the value of their personal data?

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