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Microsoft covets LinkedIn algorithms

Gregg Keizer | June 15, 2016
They're even more valuable than the data in the US$26 billion deal, says analyst.

On Monday, during a call with reporters and analysts, LinkedIn CEO Jeff Weiner -- who will remain in charge of the company after the deal closes -- described the economic graph as a " profile ... for every one of the three billion members of the global workforce," along with profiles of every company, and representations of the jobs each hoped to fill.

With that in place, and Microsoft's data on its 1.2 billion Office users, Microsoft could tout a service that shows companies what positions would be of most value to the firm, what skills are needed and who has those skills. Such a service, Sussin said, would be ideal for seeding startups with the right mix of employees.

One reason why Sussin ranked LinkedIn's data behind its algorithms was because she saw pitfalls if Microsoft misused that data or commingled it improperly with its own.

"If LinkedIn users feel that their data is being misused, if it pops up within Office, for example, they may stop contributing to the [LinkedIn] network," Sussin said. That would add to a problem LinkedIn already faces -- only about a quarter of the social network's user base visits the site monthly -- decimate LinkedIn, and quickly lower its value to Microsoft.

"I'm concerned that the misuse of LinkedIn customer data by a large provider like Microsoft will actually be detrimental to LinkedIn's ability to stand up as a consumer-driven network," said Sussin. "Microsoft has to be so careful on how it uses the LinkedIn data, or [the value] could just self-explode."

In fact, when asked how she would advise Microsoft if asked, Sussin immediately suggested starting with the algorithms, not by diving into the data mine. "I think they could more heavily leverage the algorithms than the data" without much risk, she said.

On Monday, Microsoft said it would shoot for closing the LinkedIn deal by the end of this year. It will require regulatory approval in the U.S., the European Union and Canada before the transaction is wrapped up.

 

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