After shifting through the opening pages of the presentation notes, with a crackling backdrop of executives talking analysts and media through the acquisition over conference call, one thing remains clear.
Microsoft’s $US26.2 billion acquisition of LinkedIn is an acquisition of professional convenience, a marriage of business services in a Cloud-focused economy.
On paper, and told through marketing rhetoric, it’s the story of the world’s leading professional cloud, meeting the world’s leading professional network.
But in short, Redmond sees untapped potential in driving increased engagement across LinkedIn, Office 365 and Dynamics, in a move designed to boost sales of its business and email software.
The acquisition exposes Microsoft to more than 433 million members worldwide, billed as a precious commodity in a data-driven and deeply connected world.
“That's a valuable asset that can be deeply integrated with a number of Microsoft assets such as Office 365, Exchange and Outlook,” CCS Insight Head of Research, Ben Wood, when talking to the BBC.
“That said, Microsoft has stated that the company will continue to operate as an independent business, so we'll have to see how deeply the integration occurs.”
As outlined during the presentation, while Microsoft and LinkedIn are highly complimentary, both companies participate in unique total addressable markets, reaching $US200 billion and $US115 billion markets respectively.
In addition to TAM growth, Redmond believes the likelihood of seizing more of the industry will increase through differentiated experience, which rises 58 per cent to $US315 billion through the acquisition.
“We’ll accelerate engagement and usage through a variety of different business models, subscriptions for individuals, subscriptions for organisations as well as advertising,” Microsoft CEO, Satya Nadella, said during the conference call.
“So that’s really the opportunity ahead. Think about how Dynamics, for example, gets enhanced with LinkedIn Recruiter, how Dynamics gets enhanced with Sales Navigator and social selling.
“How you can take some of the learning solutions of LinkedIn and then build out the full learning management solutions. The marketing solutions that LinkedIn has and our distribution.”
But then, of course, not to forget, Office 365 usage, which Nadella said remains “at the core” of Microsoft, and the LinkedIn usage.
“So this is how we realise that total addressable market,” Nadella explained. “And our share of this total addressable market is just nine percent, so we see plenty of opportunity going forward.”
With regard to the LinkedIn’s membership figures, now up to north of 433 million, China remains the company’s fastest growing market, which is not surprising given the size of the addressable opportunity there.
“One in five of the world’s knowledge workers and students, pre-professionals, if you will, reside within China,” LinkedIn CEO, Jeff Weiner, added. “So that continues to be a focus area for us.”
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