Microsoft announced a considerably large acquisition today with their purchase of the professional network website LinkedIn.
At first glance, there is some intuitive value by combining the two companies. Microsoft is a leader in software people use at work, and LinkedIn is the leading network for people looking for work. But is the natural opportunity for collaboration in the work environment worth $26.2 billion? That is pretty much the question that CEOs Satya Nadella and Jeff Weiner tried to answer today when they further explained the strategy for their merger and assure investors that this is the right use of all that cash.
The call took place aarlier today at 8:45am PST with Microsoft CEO Satya Nadella, LinkedIn CEO Jeff Weiner, Microsoft CFO Amy Hood and Microsoft Chief Legal Office Brad Smith hosting a call with investors. It was a chance to explain the merger more in-depth and the future opportunities for growth for the combined companies. The first half of the call Nadella and Weiner took investors through a PowerPoint presentation illustrating what Microsoft and LinkedIn synergies look like. And there are certainly some interesting ways the two companies can benefit from working together as a single company. Here are a couple of the examples discussed on this morning’s call.
LinkedIn Profiles in Office
With this merger, Nadella and Weiner envision individual's LinkedIn profiles becoming the social fabric that connects all of the Office apps and Microsoft services you use at work. This will help Office apps and Microsoft services deliver relevant information to help you be more productive and gain insights as you work. It seems this could be anything from Lynda.com courses, to information from your LinkedIn network.
A more Intelligent LinkedIn Newsfeed
LinkedIn will be able to deliver a more relevant Newsfeed using Microsoft's expertise in machine learning algorithms as well as connecting to the meetings and projects you are currently engaged in on your Office 365 apps.
Microsoft's personal digital assistant will become more useful in the workplace by being more deeply integrated with your LinkedIn information, delivering contextually relevant information. This could be as simple as Cortana informing you about people you're scheduled to meet with. But in the conference call they also allude to their being more advanced ways "Cortana will also know your entire professional network to connect dots on your behalf so you stay one step ahead."
LinkedIn's Sales Navigator will be coming to Dynamics CRM to help sales people turn cold calls into more warm introductions by connecting networks and finding ways to make introductions.
Just in Time Social Learning
Nadella and Weiner also talked about how a growing trend in the workplace is an employee's skill set is now anything but constant. As the workplace transforms, employees have to keep learning new skills throughout their career. Education is no longer something that takes place before you get to the job place, it is an ongoing lifelong pursuit. The merger will bring new opportunities for on-the-job training with LinkedIn learning integrated into Office.
LinkedIn currently collects a lot of data on employees and organizations of all types and the links between them all, like who is hiring and for what projects or skills. And the company is working to put all of that data into a knowledge base called the Economic Graph to digitally map the economy. By merging with Microsoft, LinkedIn will be able to accelerate their realization of a full Economic Graph by leveraging all of the data Microsoft collects with its own Office Graph.
Today's announcement is big in terms of dollars and in terms of opportunities for the two companies. Combining the world's leading professional cloud with the world's leading professional network will surely have some new synergies that can't even be fully conceived yet. It will be interesting to see what these two data-intensive companies come up with when working closely together under a singular mission to empower people to do more.
The merger isn't expected to be completed until sometime later this calendar year, so it might be a little while before we start to see what innovative collaborations take place. But all in all, it looks like it will be a great value-add for Microsoft. While fielding calls from investors, CFO Amy Hood says she is even more confident that this acquisition will help the company achieve its goal of a $20 billion run rate for cloud revenue.