Microsoft’s LinkedIn acquisition is a data and advertising play

Written by: Sarah Vizard
Published on: 12 Jun 2016

Microsoft’s LinkedIn article

Microsoft is buying LinkedIn for $26.2bn in a deal that the two companies say will “change the way the world works” but will also provide both with more data so they can serve more relevant content and advertising.

Under the deal, LinkedIn says it will retain its “distinct brand, culture and independence. LinkedIn CEO will remain CEO, reporting into Microsoft’s boss Satya Nadella. The deal is expected to close by the end of the year.

The deal was not totally unexpected, with both companies focused on the B2B marketing, Microsoft through software including Office and Outlook, and LinkedIn through its professional social network. Yet both have seen sales slow, with the two hoping this provides the antidote.

Speaking on an analyst call this afternoon (13 June) Satya Nadella said there would be some “easy wins” for the two companies, including the ability to allow LinkedIn users to share their Microsoft calendar with their news feed or to make it easier to access LinkedIn by incorporating it in their inboxes, browsers and Microsoft’s voice search service Cortana.

“What you will see going on in the beginning is some good quick wins. Then there will be deeper integration that offers more value but puts customers in control,” he said.

It is LinkedIn’s data that Microsoft is most interested in. Nadella believes the acquisition offers it a chance to get ahead in machine learning and artificial intelligence. He says combining LinkedIn’s profile information with what Microsoft knows about workers’ projects, calendar and companies could help “solve a relevance problem”.

“This can drive targeting and relevance to the next level,” he adds.

For Weiner, this is also an opportunity to boost ad sales and offer brands more marketing solutions. “We are in a position now where we can unlock additional inventory from within the Microsoft ecosystem. Sponsored content is our fastest growing business at scale, there is also additional opportunity there.”

Using the data that both firms have on their clients, they hope they can change the way people work. Weiner explains: “We are passionate about learning that is our core conviction and vision. The days of a professional having a job for the rest of their life have come to an end. That is a virtue of the pace of change. We want to train people for the jobs that are and will.

“This brings together the world’s professional cloud and the world’s professional network,” he says.