Marriage of Microsoft & LinkedIn: fusion of data, intelligent automation and applications

Analysts: Sheryl Kingstone, Scott Denne, Donnie Berkholz, Ian Hughes, Brenon Daly

On June 13, Microsoft announced plans to acquire LinkedIn for $26 billion. While the list of potential revenue synergies is long, there are three key themes that can be leveraged for future differentiation:

- Data and cloud: Even with a low estimate of one-quarter of LinkedIn's monthly active users, Microsoft can now create a social graph with interests, professional network, company size, etc.
- Intelligent automation: Cognitive and self-learning systems – as well as the data that drives them – are playing an increasing role in the evolution of business applications.
- Enterprise applications: A platform, and not just a destination, that leverages LinkedIn's data to not only augment several of Microsoft's business applications, but an entire app ecosystem.

The 451 Take

The fact that LinkedIn provides a wealth of business profiles makes it attractive to B2B advertisers. Microsoft needs to create a new onboarding experience to enable marketing and advertisers to reach decision-makers. Integrating the data into a variety of Microsoft products, once those are tied to a LinkedIn identity, could create a phenomenal B2B targeting opportunity. It would also provide Microsoft with the ability to drive additional cloud revenue. Microsoft's Azure ML will also provide several options for providing contextual guidance on the data, as well as embedding intelligence into Cortana, Dynamics and Office. The more data to plug into a machine-learning environment, the more accurate the outcome, such as correlating people's backgrounds, interests and abilities to intelligently recommend insight based on hundreds of different data points. It makes the future combination potentially incredibly powerful. Microsoft/LinkedIn must create a platform that embeds the right information at the right time for the right processes to change the dynamics of the business applications market. The future of LinkedIn's API is still unknown; the question remains: Does Microsoft enable an app developer ecosystem around it, or cripple it to enable a competitive advantage?

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