Microsoft buys LinkedIn: What next?

Angus Kidman 14 June 2016

MicrosoftLinkedIn

The real beneficiary of the $35 billion purchase will be Office 365.

On a day filled with fresh announcements from Apple and new console plans, the most surprising tech news come from an entirely unexpected direction: Microsoft is buying business social networking tool LinkedIn for a cool $US26.2 billion (that's roughly $35 billion at today's exchange rate).

Microsoft has rushed to assure LinkedIn users that nothing will change. LinkedIn will continue to operate as a separate company, and apps for non-Microsoft platforms like the iPhone and Android will continue to be developed. Microsoft has been down this road before with Skype, which was a similarly pricey acquisition back in 2011.

As with Skype, we can expected to see LinkedIn more closely integrated into Microsoft products over time. While there are some possibilities with Windows 10 and its People app, it looks like the big game for Microsoft here is integrating LinkedIn into Office 365, the subscription version of Microsoft's desktop productivity suite.

This makes sense, if only because it's one of the few ways it's possible to imagine LinkedIn making real money. Job advertising and people paying for LinkedIn Premium haven't turned it into a profitable business. But adding LinkedIn services to the paid Office 365 subscription does potentially improve its stickiness. "This combination will make it possible for new experiences such as a LinkedIn newsfeed that serves up articles based on the project you are working on and Office suggesting an expert to connect with via LinkedIn to help with a task you’re trying to complete," Microsoft CEO Satya Nadella suggested in an email to staff.

Boosting Office 365 is a wise move. With 70 million active monthly users, it's doing well, but that's still only a fraction of the 1.2 billion total office users.

Culturally, it's also a sensible fit. The most reliable business for Microsoft right now is its enterprise division, and LinkedIn has a similar focus. We won't see any changes for a while (the deal isn't due to close until the end of 2016), and even then I imagine that it will be steady as she goes.

One thing I hope does change: the announcement describes LinkedIn as the "world's leading professional cloud". Let's stick with calling it a "social network" so people know what we mean, please.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

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