So, LinkedIn is now Microsoft. The tech community at silicon valley may have guessed it but the venture capitalists should have wanted it badly. Microsoft is like a grandpa who would not part with any of his money unless it is for charity. By paying for LinkedIn in cash, the veteran company has finally let loose some capital for investing in new startups. This is the best part of the whole deal. Jeff Wiener, if you can hear me, I would like to say… brilliant work!
It is worth noting that in temperament, Microsoft and LinkedIn have some close similarities. Business wise, they are both quite stable, don’t make too much noise and have a seriousness about them. Also their products have a professional proximity. They serve similar age groups and provide enterprise level solutions. I must say it’s a compatible acquisition. Let’s look at some of the takeaways from this buyout.
Social Networks Matter
One thing that is certain from this giant, mother of all, tech acquisition is that social networks have an intrinsic value that no business can ignore. This has two aspects in terms business. It matters having a great social media presence as well as owning a great social network. Any organization with a product needs to understand the power of social capital. Microsoft did, finally. Apart from a few attempts at developing its own developer network for windows app, Microsoft has been incredibly shy at jumping into the social media platform scene. Boy oh boy when it finally decided to descend.
Data is What Everyone’s After
Besides being one of the biggest tech acquisitions as far as memory serves, this has been an incredibly silent one. In its classic hush hush way, Microsoft has once again paddled under the water while remaining calm over it. Official announcements came in lazily without much hullabaloo. “Meh, we bought LinkedIn…”. Well speculations on why would a company that largely sells an operating system and a few office tools would go on to buy a professional social network were as cold as ever. “Probably they just want to sell their Office 360 to us”. Sure, with increasing competition from open source products like Google Docs, Microsoft has to find a way to find new customers but come on! There has to be something more than just acquiring a revenue earning venture that’ll pay for something that’s mostly considered free. The secret is in data. With LinkedIn, Microsoft has not just acquired a giant list of unemployed people but also gained command of a superb search engine, an analytics platform, a popular blogging platform, an API framework and a revenue earning ad network. All within a little over a year’s pay. Bravo Microsoft!
HRs Need to Up Their Game
What I recently found out is that in comparison to the kind of power HR has over an organization, it is the least invested in department. Small and medium businesses have almost no infrastructure meant exclusively for talent management. Even in larger organizations, spending on HR development is almost nonexistent. LinkedIn has become the single, most effective tool for most HRs to perform most of their functions. At least it fills that need gap. However the dependency is almost crippling. Whatever the fate of LinkedIn is in the hands of Microsoft’s overlords, talent managers need to be more sharp and insightful. I don’t mean that in a statistical, data driven way. Relying on recruitment automation is great but you may be overlooking talent by giving up personal involvement in favour of easy decisions based on pre-digested information.
The Big Fish Will Eat You
No matter how big you are, you’re always a prey for a larger predator. Until the day your business is swallowed by a bigger fish, you’re basically fattening it up to make sure that you seem more appealing. Even though I knew it, I refused to believe it until LinkedIn proved it. LinkedIn’s stock prices were the opposite of a company that’s looking to sell off. In many regards it was way different from all other acquisitions of Microsoft including Nokia. Even Skype was not in the shape LinkedIn is. It remains to be seen that how the professional network thrives in the belly of the beast. $26 Billion looks too yummy to resist. One thing is amply clear that we’re all in it for the money. At least startups should be. It simplifies things. Focus on profitability. Find ways to build revenue. Create solutions that people really pay for. Those guys sitting in the Shark Tank must be smirking.
Let me know what you think about this acquisition in your comments. Do you think LinkedIn will get watered down as Microsoft tries to bring in its own influence or will it continue to grow independently? If you want to checkout a platform like LinkedIn, sign up on Shockfruit.com, a professional marketplace for sports minded people.