information is key

When Microsoft purchased LinkedIn for $26.2 billion on the surface it looked like just another tech giant purchasing a social media platform. The reasons for which could simply be that it's lucrative. Social media is huge and Microsoft wanted in. Right? Well maybe not so much. Yes, social media can be very lucrative, and yes Microsoft was looking at the numbers when purchasing LinkedIn, but that's not all it was looking at. 

It doesn't take a genius to realize that what Microsoft is really after is information. Think about what goes into a social networking profile - all that personal information. Microsoft purchasing LinkedIn means Microsoft is getting much more than simply great quarterly earnings numbers.

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1. a perfect fit

Make no mistake, Microsoft wasn't looking to buy just any social media platform. There weren't any $3 billion offers on the table for SnapChat from the tech giant. They targeted LinkedIn for a reason: The user base for the platform is very similar to the user base of individuals that buy and use their products on a daily basis.

Microsoft is a software giant. Everyday, millions (and probably closer to billions) of working professionals head into work, get to their desks and log in to their workstations running... you guessed it: Microsoft Windows. The most popular is still Windows 7, but version 10 use is on the rise and will soon surpass the other versions of the OS. So it's easy to see just how attractive this particular platform was to them - and they clearly put their money where their mind was.

2. big data and customer information

OK, so what does that mean? It may not seem like a big deal on the surface, but think about what a social media platform is made up of. It's made up of profiles of hundreds of millions of users. These profiles contain personal information about what people like, what they are clicking on, what they are interested in, what articles are they reading. The list goes on and is even deeper and more involved than you can imaging. Big data is everything in this purchase.

The immediate impact is just that: big data. That's what Microsoft gets with it's purchase in the short term. It can now begin looking through massive amounts of data, analyze that data, and begin to aim their marketing and sales techniques around what they learn from that data. All they need to do is make a very basic assumption and that assumption is that the same people that are using LinkedIn are the current/potential consumers of your products. Microsoft didn't just buy a social media platform for professionals. They bought a personal information database on users that perfectly fit their target market (if you're a marketer think buyer personas)! That alone is worth $26.2 billion leave aside the profitability and potential revenue of the platform. That is the core of why Microsoft made this purchase.

3. impact & integration

A) windows

So what's the long term impact and outlook for this purchase? Well it's probably many of the things that many people thought of when they first heard about the deal between the two companies. We can probably expect full integration into multiple Microsoft products. I'm very interested to see how they find a way to integrate it into the OS. The integration of Microsoft's search engine Bing was fairly seamless as there were lots of search functions already available in the old OS's. I discussed what this acquisition could mean in relation to Bing in this article. I'm shooting from the hip here but it could mean a desktop application to manage your LinkedIn profile and activity right from your main screen. It could also mean a full blown LinkedIn application that ships with Windows 10. Who knows? This is an area I'll really be interested to revisit a few months down the road.

b) Office 365

It's easier for me to see how they would integrate LinkedIn to their cloud-based products, specifically Office 365. I'm sure they'll find a way to integrate sharing into Outlook as well as any other products. They'll definitely integrate the Cloud based file sharing and storage program "OneCloud" into LinkedIn and vice verse. The ability to share files and documents with your LinkedIn connections could have a huge impact on marketing and even group collaboration. This is where your imagination can really get going. There are so many possibilities for software integration it's quite amazing. I don't want to discount these as an important factor in the decision Microsoft made to acquire the company. However, I speculate that this was more like icing on the cake for Microsoft as the user data is really the key to the big money return on this investment.

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