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Business Management

Microsoft-LinkedIn: A curious combination

It’s easy to write about mergers and acquisitions from a 1 + 1 = 2 perspective, joining the dots between strategy and likely outcome. But frankly I don’t know what to make of the Microsoft-LinkedIn deal except to say that it’s good to see Microsoft chancing its hand. So the following will be like that marvellous song – more questions than answers…

We know that Microsoft has agreed a deal to buy LinkedIn for over $26bn. Why?

First, Microsoft is a company that is ringing the changes. CEO Satya Nadella clearly has an appetite for change and sees the need to re-energise the company that had become profitably moribund on the fat cash cows of Windows and Office. Positive.

Second, what is Microsoft doing buying what is effectively the office jockey’s version of Facebook and the hiring playground of the same? LinkedIn is dominant in its field but attempts to become a publishing organisation have faltered. Too much crap content, self-publishing and listicles. Is Lynda.com, the online learning platform, a factor? If it is then I still fail to see the connection between Redmond and Mountain View. Not so good.

Third, how can Microsoft accommodate LinkedIn? It can well afford the company as it remains a software colossus but is there a fit, and are there synergies? Nope and nope.

Also, Microsoft has an iffy record in M&A. Attempts to buy Yahoo never came off and look, in retrospect, misguided. There were also reports of buying Google and SAP many years ago and latterly Salesforce.com – neither came off. When Microsoft did get its man, with the purchase of adtech firm Aquantive, much of the value had to be written down. But generally Microsoft is a tactical rather than serial acquirer.

So here we have it: Microsoft remains the 800-pound gorilla in B2B productivity software and platforms. LinkedIn owns hiring. Shall the twain ever meet?

One concern and cause for pause might be that we will have the world’s largest software company buying the company that is the ground zero for tech hiring. Could the regulators pursue this line of enquiry and might Microsoft be forced to create church/state barriers? Maybe, and Microsoft might have to swerve creating the usual integration links that are typically the rationale for such deals.

 

Also read:

Microsoft Linux switch shows openness

Microsoft is reinvigorated and ready to go again

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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