Why Microsoft Bought LinkedIn

Microsoft and LinkedIn are a natural fit, and the deal may fare better than Microsoft’s past acquisitions

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There is real synergy between the companies and their products, particularly Microsoft’s Office productivity suite—now delivered primarily online—and LinkedIn’s core database of more than 400 million mostly professional profiles.

As Microsoft Chief Executive Satya Nadella told The Wall Street Journal, “It’s really the coming together of the professional cloud and the professional network.” In other words, we now work by toggling between our productivity software and our social networks. But why should the two be separate?

Mr. Nadella is betting that were these two concepts reconceived today, they would be one.

Microsoft has agreed to buy professional social network LinkedIn for $26.2 billion. The software giant hopes to jump-start its software packages by connecting them with LinkedIn's vast network.

LinkedIn’s users are, arguably, Microsoft’s core demographic. They also offer Microsoft something it has long sought but never had—a network with which users identify. Microsoft needs to persuade LinkedIn users to adopt that identity, and use it across as many Microsoft products as possible.

Access to those users, as well as the enormous amounts of data they throw off, could yield insights and products within Microsoft that allow it to monetize its investment in LinkedIn in ways that the professional networking site might not be able to. Mr. Nadella already has mentioned a few of these, including going into a sales meeting armed with the bios of participants, and getting a feed of potential experts from LinkedIn whenever Office notices you’re working on a relevant task.


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