Microsoft Buys LinkedIn For $26 Billion In The Battle For Digital Talent Platforms

The long-held rumors of LinkedIN not being able to develop its own new growth commercial strategies with its net income falling in 2015 falling again year on year from 2011 have finally come home with the Microsoft acquisition of $26 billion in cash.

LinkedIN founded in 2002 in the early days of social media long before facebook (2004 ) and twitter (founded 2006) has grown its revenue in the business social network niche market over several years going public in 2011.

It had grown a user base of 106 million active users by 2016 but compared to 310 million twitter active user and the mighty 1.65 billion active facebook monthly users had never managed to grow its commercial services in what could have been a strong enterprise market.

LinkedIn makes two-thirds of its income from talent solutions in the recruiting and job market platform services that define LinkedIN and the remainder in selling marketing solutions and premium subscriptions, it has remained the website to go to job networking and professional networking.

Microsoft's ten times valuation of LinkedIN company is typical of an acquisition value and makes sense in Microsoft's link with Enterprise in its Cloud platform and portfolio of enterprise business services.

To that extent, it is a good acquisition strategy for Microsoft perspective to build out its enterprise services capabilities.

It will be interesting to see it Microsoft will integrate this into their Office products or to extend its earlier smaller business social network Yammer platform acquisition and over the internet video and voice calls of skype. A more significant strategy is to bring LinkedIN into the Microsoft Dynamics CRM to provide a strong enterprise selling and social integration with its customer management. This is a logical response to competitors such as Salesforce.com and workaday in human resource management who have realised the importance and rise of social network collaboration in modern connected enterprises.

What is more likely it the growing use of social media and digital tools that are increasingly defining the "digital workforce" that will be defined by always-connected employees and subcontractors with company and on-the-go services on the mobile apps. The role of "talent management" is becoming increasingly critical to enterprises as employees and perspectives new staff productivity will be through human resources platforms that can bridge the commercial world of work activities and the knowledge sharing and collaboration that defines modern digital economy.