The world looked one direction, and Microsoft slipped a multi-billion dollar cash purchase past us.
While political news dominated the air and digital waves, the acquisition of LinkedIn by Microsoft almost went without notice. But, this week, it’s finally possible to let Microsoft’s largest acquisition in history sink in. At $26.2 billion, the acquisition of LinkedIn is more than three times the size of Microsoft’s acquisition of Skype in 2011 for (what’s now, a mere) $8.5 billion (via CNN Money).
It may not come as a total surprise, however, as Microsoft has been hedging its bets in the social networking world for a few years now.
Microsoft bought Yammer, a “freemium” private social network for corporate use similar to Facebook, for $1.2 billion back in 2012. Yammer came with a user base of more than 200,000 companies, which—one can guess—would help Microsoft build a larger B2B clientele for its Office products (via Forbes).
LinkedIn, with more than 433 million members, seems to have added to Microsoft’s incentive to invest in the corporate world of networking. LinkedIn, for its part, has been equally eager to grow.
In February 2016, LinkedIn shares closed down 43.6 percent, which represented $11 billion in market value. Furthermore, LinkedIn reported that online ad revenue growth slowed to 20 percent in the latest quarter from 56 percent a year earlier, as reported by Reuters.
All in all, LinkedIn may have been looking for the kind of leverage Microsoft offers to pull them out of a financial funk.
Chief executive at Microsoft, Satya Nadella, shed some light on the purchase, saying in an email to Microsoft employees, “This combination [of Microsoft and LinkedIn] will make it possible for new experiences,” such as “Office suggesting an expert to connect with via LinkedIn to help with a task you’re trying to complete.”
In addition, he said that these experiences will “get more intelligent and delightful.”
Some, however, are convinced that this combination will be, in fact, neither intelligent nor delightful.
“Did Mr. Nadella, who has been at Microsoft since 1992, learn nothing from the Clippy disaster? Clippy, the animated anthropomorphic paper clip introduced in 1996, popped up unbidden in Microsoft Office programs to offer advice. ‘Are you writing a letter?’ it would ask annoyingly. Clippy became famous for the ire it provoked and, in 2010, Time magazine included Clippy in a roundup of the 50 worst inventions of all time, along with asbestos, leaded gasoline and pay toilets.”
Mergers are certainly on the mind. It’s hard to know when your firm is falling behind and when it’s correctly eschewing technological change.
Change can be powerful for growth. But even great firms fail. Leadership—and majority market share—in the personal computer industry changed hands often from Altair, to Tandy, to Apple, to IBM, to Compaq, to Dell, to HP (Tellis and Golder 1996; 2001). And, Microsoft executives are acutely aware of the acquisitions made by their social network competitors. Even Mr. Stross for The New York Times laments:
“But I suspect that both Mr. Nadella [of Microsoft] and Mr. Weiner [of LinkedIn] are afflicted with extremely bad cases of Facebook envy. Every tech company, including Microsoft, contemplated buying, or actually tried to buy, Facebook in its early days, and all are haunted by the thought of the deal that got away. Today, Facebook’s market capitalization is about $320 billion, not that far behind Microsoft’s $394 billion.”
Merger mania is upon us. Yet, key questions remain unanswered: what is more important to success? Does success depend on high-quality products or, today, does it depend entirely on a social network peers?
Excel, Word, Outlook, PowerPoint… your Office partners are such familiar friends, but when they prevent you from doing what you need to do, they can turn into enemies.
In fact, even if you use Microsoft programs on a daily basis, there’s always something you want to do—and you’re certain it can be done!—but you don’t know how do it.
Have you ever thought:
- “There’s got to be an easier way?”
- Are you overwhelmed by the computer work you need to get done every day?
- Do you feel like it takes too long to get things done in your Office programs but you don’t have the time to learn the shortcuts and new features?
If you answered “yes” to any of these questions then take C4CM’s audio course, “Top 10 Microsoft Office Tips, Tools, Tricks and Shortcuts: From Basic Business User to Power User,” on Tuesday, July 12, 2016 from 2:00 PM To 3:15 PM Eastern.
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