by Sanjeev Kapoor 09 Feb 2018
Synergistic effect of LinkedIn’s takeover by Microsoft
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Synergistic effect of LinkedIn’s takeover by Microsoft

LinkedIn is undoubtedly one of the main pillars of the global social media ecosystem as it is the primary site used by professionals worldwide. As such it is also the most prominent professional network which enables networking with ex-colleagues, potential clients and collaborators. Besides serving as a portal that provides ample professional job opportunities for job searchers it has also evolved as a platform that provides a wealth of learning opportunities. This is enabled by professionals who share up-to-date information about their activities while at the same time discussing them through messages, posts and interest groups.

Back in June 2016, LinkedIn was acquired by Microsoft as part of a nearly $27 billion deal which many analysts considered as a considerable price at that time.  Much was said and written about this deal in an effort to demystify the business drivers that led Microsoft to this move and also to understand what lies ahead. Today, several months after the conclusion of the deal it’s probably a good time to reflect on what happened and separate the true signals from noise.

 

Understanding the Drivers

It’s always difficult to pick up the right time for a good deal but in this case it seems that 2016 represented a good timing for both sides as a result of the following factors:

 

Experiencing the Implication

Overall, the timing was perfect for both Microsoft and LinkedIn to engage in this deal.  The implications of the deal in the business community have not become evident yet. However, we are now in the position to make some assumptions about the medium and longer-term implications:

 

Overall, the acquisition could have a major impact in the business world as it leverages the human resources and also revolutionizes the learning processes which could provide opportunities for increasing productivity and competitiveness. Currently, it’s probably quite early to judge whether the above-listed predictions will actually be realized. Nevertheless, it’s crystal clear that Microsoft made a strategic move that could set it apart in key markets including advertising, recruitment and mobile services market. Even if our predictions do not materialize Microsoft will hold a strategic position in these markets and will be offered with a host of opportunities for business growth. After all, the process of excelling in IT products and services is a marathon race rather than a short to medium term endeavor.

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