LinkedIn for $26 billion? What’s the big idea, Microsoft?

It might not be the most glamorous social media website. That title might better fit Twitter, with its enthusiastic devotees Taylor Swift, Katy Perry, Justin Bieber, Barack Obama and many more. 

Nor is it the biggest, Facebook having passed the 1-billion mark some time ago.

No, by comparison, some would argue, LinkedIn is the glum but purposeful colleague who may be important to the company, but is a person whom no one knows quite how to relate to.

But for Microsoft, such qualities have led it to shelling out a massive $26 billion to buy LinkedIn, leaving many wondering why.

Even for Microsoft, $26 billion is a lot of money.

LinkedIn, for those who don’t know, is estimated to be the third- or fourth-largest social network after Facebook, Twitter, YouTube (depending on whose stats you believe).

But crucially for Microsoft, LinkedIn has the right profile — from aspiring young career-minded graduates to senior executives at very large companies, many millions of working people are reasonably comfortably settled residents of LinkedIn-land.

It seems obvious that for Microsoft the business market is key. Having turned Skype from fun, video-calling software used by millions of consumers into a slick, professional, video-conferencing app used by millions of businesses, it is perhaps inevitable that the company will somehow link the two.

LinkedIn with Skype built it. Sounds like a good idea.

Facebook, another company which benefited from Microsoft’s billions in the early days of the social network’s life, also integrated Skype but it’s not the same thing.

While a lot of businesses may have a Facebook page, most of the people working at those businesses probably use Facebook for their personal social lives. Whereas they use LinkedIn for their working life.

Besides, Microsoft was, and still is, a minority stakeholder in Facebook.

With the LinkedIn takeover, Microsoft, which has already rebranded the website, will have even greater access to the market it most covets — business.

With IBM’s step back into the shadows whence it came, it falls on Microsoft — which itself became globally dominant through its association with IBM — to take its place as the contemporary corporate Big Brother.

So far, its attempts haven’t been as successful as they might have been. Its Office 365 suite was slow out of the blocks. The company’s apparent suspicion of the open space of the internet was possibly anathema to its closed, desktop-dominating Windows world.

This in spite of its attempt to rebrand itself as an internet company, an effort which seems somewhat inane considering it still hasn’t properly understood the internet and how it fits in with its products.

Meanwhile, with much less fanfare, Google came to dominate the internet through its classic search engine, and online productivity through its Google Docs system, which grew into something quite unique at the time.

Microsoft was left playing catch-up, perhaps wondering what would happen to its core desktop market if it took all its apps online.

The world has changed and the desktop is not necessarily the place to be any more. It’s all about mobile and cloud and so on. And Microsoft seems to have realised that and is willing to pay the price for its initial indecisiveness. Remember, it bought Skype for $8.5 billion in 2011, which was also seen as too much.

Now, things may be coming full circle, with Google apparently responding by reaching an agreement with Microsoft ally RingCentral, according to

The deal would mean Google’s apps would be bundled in with RingCentral Office.

RingCentral specialises in internet telephony.

Despite having its own social media website and a range of communications software, hosted online and delivered through its not-inconsiderable cloud infrastructure, Google seems to feel that it hasn’t yet got its feet comfortably under the business desk, metaphorically speaking.

It might be worth noting here that one of the reasons Microsoft ended up paying so much for LinkedIn was because Google was also bidding to buy the company. So was Salesforce. But Microsoft has shown many times that if there’s anything it can do well, it’s spend a lot of money buying companies.


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