The announcement that Microsoft is acquiring LinkedIn makes good business sense for Microsoft. This gives Microsoft direct access to hundreds of millions of LinkedIn members, who are essentially "customers" in the business world - individuals, entities, etc. And Microsoft has plenty to sell them. On the other hand, Microsoft also has hundreds of millions of customers - from licensees of Office 365 to corporate customers using Yammer, and from countless other sources.
In one fell swoop this becomes a massive customer base. While perhaps not a monopoly, the combination of the two companies certainly provides Microsoft with a huge marketplace to serve and sell their wares.
This is in remarkable contradiction to the company they just acquired, as LinkedIn tracks everything their members do and targets ads to them, "on and off our Service." Read that again - on and off their service. Take a look:
After you create an account [at LinkedIn] you may choose to provide additional information on your LinkedIn profile, such as descriptions of your skills, professional experience, and educational background. You can list honors, awards, professional affiliations, Group memberships, networking objectives, companies or individuals that you follow, and other information including content . . . Providing additional information enables you to derive more benefit from our Services . . . It also enables us to serve you ads and other relevant content on and off of our Service.
The fundamental question to pose Microsoft with today is whether they have thrown in their proverbial towel of privacy protection for people of the world? While admittedly they weren't great at it, they certainly were legions ahead of their new division.
Most of us can easily remember Microsoft's Google-bashing "Sgroogled" campaign of the past few years (terminated in 2015) on the web, on television, and across media channels: "The multi-million dollar multi-year campaign -- which had appeared on TV, in newspapers, online and even extended to a merchandise range -- mocked everything from Google's Shopping search rankings allegedly being dictated by how much advertisers were willing to pay to boost themselves up the search results page, to a major push claiming Gmail violated users' privacy by scanning emails for key words in order to serve targeted ads."
Today Microsoft has convincingly back-pedaled. Their statements about the merger proclaim a 100% hands-off approach - LinkedIn will operate as it always has. Perhaps taking a page from the recent trends in social media, where all the giants (Snapchat, Twitter, Instagram, Facebook, and yes, even WhatsApp) are now actively using algorithms, advanced tracking methods, and targeted ads on and off their sites, Microsoft has seen that dollars are to be made to pad their coffers (currently estimated to be about $105B, and of course one can never have enough).
So who loses today? This is an interesting question. Paradoxically, TechCrunch recently published a convincing piece titled: "Why You Should Bet Big on Privacy." The article opens with the author (Rand Hindi) stating: "Ever felt like you were being watched online? You know, like when you read something about New York, and the next site you visit shows you ads for New York hotels? As it turns out, on my computer, there were more than 130 companies tracking my every move . . ."
Yes, privacy loses today in Microsoft's massive gastronomic gulp while looking the other way - but the unanswered question is whether privacy will begin to win in the near future. TechCrunch thinks it will. So do I. Microsoft may be a bit shortsighted in their rush to create one of the world's largest customer bases and by doing so turning their back on the right to privacy they had so carefully built their reputation around.