Microsoft announced that it will acquire professional networking giant LinkedIn for $26.2 billion in cash on Monday. The acquisition, the largest in Microsoft’s history, represents a landmark moment for Microsoft and the technology industry as a whole by underscoring Microsoft’s transition from devices qua PCs and operating systems to cloud-based software and infrastructures under current CEO Satya Nadella. As Nadella put things in an interview, the acquisition brings together the “professional cloud and professional network.” With over 400 million members, LinkedIn represents a treasure trove of data not only about professionals, but also about hiring trends and the global labor market more generally. Microsoft stands in a better position to monetize the surfeit of data that resides within LinkedIn that LinkedIn itself, but will need to demonstrate an ability to execute on a strategic plan for integrating and monetizing LinkedIn swiftly in order to appease investors eager to see value from the deal. As such, the deal represents a ripe opportunity for Nadella to showcase Microsoft’s renewed capabilities for innovation and operational agility while further demonstrating components of his “cloud-first” vision for the company. Microsoft’s acquisition of LinkedIn constitutes emphatic validation of the business model of SaaS social media companies and underscores the business value of data about collaboration. Microsoft’s task now will be to drive the development of synergies between its portfolio of products and services and LinkedIn and possibly even leverage LinkedIn’s core backend technology platform to build applications that richly deliver possibilities for collaboration and communication in an age where the frequency of device-enabled communication claims parity with face to face interaction between human beings.
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