It’s no secret that Microsoft has made a string of very large and very poor investments over the last several years.
Its $9.4 billion acquisition of the handset unit of Nokia Corp. is perhaps the most notable of its attempts to get back on top of the technology sector with a move that was way too little and way too late. Since the embarrassing deal with Nokia, a new CEO has stepped up for Microsoft.
Satya Nadella has a new game plan for the one time software giant. Instead of whatever sort of ill-timed maneuvers were in the playbook of the past, he’s been buying up a variety of small properties with huge potential. His one large purchase has been the $2.5 billion software home of the wildly popular game Minecraft. Nadella’s most recent acquisition, $26.2 billion LinkedIn, has raised more than a few eyebrows, but it’s one of the most logical buys Microsoft has made in a very long time.
A synergistic acquisition
Instead of attempting to remake a company in its own image, the purchase of LinkedIn can be seen as a synergistic acquisition. LinkedIn users could easily be viewed as a captive audience of Microsoft’s core demographic. After all, they’re the people using business and productivity software that Microsoft is selling. But it’s not a one-sided deal, not by a long shot. LinkedIn’s 13-year-old platform needs a kick in the teeth and someone (or something) to bring it some new energy. Only about 25 percent of LinkedIn’s 400 million cumulative users actually return to the site monthly.
It may be that for LinkedIn to stay on top of the social media for business sector, it will need the help of another giant in the tech game. Microsoft’s Nadella told the Wall Street Journal that he intends to give LinkedIn a great deal of autonomy. Naturally, the synergy between Microsoft products and the LinkedIn platform will follow the reestablishment of the platform as the undisputed King of Business Social.
Time will tell here
Only time will tell if the social connections LinkedIn provide will actually benefit Microsoft, or if LinkedIn will end up being just another company acquired under the Microsoft umbrella that doesn’t really pan out. However, CEO Nadella seems to have the magic touch when it comes to new purchases, so it may pay to sit back and watch what happens next.Google+