June 13, 2016
The second the story broke about Microsoft’s $26.2 billion acquisition of LinkedIn, everybody you can think of who has any kind of an opinion about either company, social media, business productivity, enterprise software, the stock market, data and mergers & acquisitions in general has weighed in on the deal’s implications for their areas of expertise. Ordinarily this would inspire some serious eye-rolling in me, but in this case it’s warranted because Microsoft has its hands in so many businesses and enterprise applications, and LinkedIn has so much consumer activity and data that many people– talking heads or otherwise– have a relevant take. Speaking of which, Forrester clients should keep an eye on our website tomorrow morning for first-take analysis from all sides of our research org. Spoiler alert: The implication for social selling and business productivity are potentially massive.
With so many different angles to examine, it’s only natural that people are asking me and the other B2C analysts what we think about it. Here’s the soundbite: The implications for B2C marketers are almost non-existent.
Here’s the longer version:
In the past, Microsoft’s interest in paid media has revolved primarily around search and display, but last July the company entered into a partnership with AOL-Verizon that essentially off-loaded its display advertising business. LinkedIn has several paid marketing products, one of which is display advertising but that revenue stream has been struggling this year. So does this acquisition mean Microsoft is hoping to get back into the display advertising business? No. Advertising revenue is a drop in the bucket compared to the larger enterprise technology plays represented by this acquisition and Microsoft admitted that ad revenue isn’t their focus with that AOL-Verizon Partnership. That said, we have two lingering questions:
Though Microsoft currently plans to let LinkedIn operate as its own business exactly as it does now, we wonder if we might see some synergies– or at least cooperation– between LinkedIn and AOL-Verizon’s sales teams in the future. The implications for advertisers are still minimal, but it could mean more diverse inventory added to the AOL-Verizon one stop shop.
If there is some sharing between LinkedIn and AOL, will this extend to data to help create more robust and reliable user IDs? We can assume that deterministic cross-device IDs from LinkedIn are of interest to Microsoft who’s been lagging in that department. But how will that store of IDs change if data is shared with and between the extended Microsoft partnership ecosystem?
The fact of LinkedIn remaining largely untouched suggests that average day-to-day users of the social network likely won’t be affected one way or the other. There is, however, one way small change we think may occur slowly over time: As Microsoft integrates LinkedIn features with workplace applications, people may start to mentally associate LinkedIn more completely with their professional lives. And that could mean a reduction in those (annoying to many, including me) Facebook-style memes, photos, political posts, and other not-really-professional posts. A small side-benefit, but one that would quiet some of the more vocal critics.
There’s one aspect of this acquisition that particularly interests me: We on the social media research team believe that social technology can help businesses achieve their post-digital transformations, but only if it’s spread beyond the marketing silo. We’ll be publishing a report on that topic in the next few weeks and we’re excited to see such huge M&A news further support our research conclusions. If Microsoft fully integrates everything from LinkedIn’s feature-set to the data, social media in the workplace will become so much more than a quick way to chat with a colleague or collaborate on a doc. It’ll be pivotal for recruiting and retention; it’ll change the way companies think about employee, prospect, and customer privacy; and it will potentially be a game changer for B2B marketing and social selling.
My colleagues Mary Shea and Steve Casey are collaborating with analysts across Forrester for a complete cross-role view of the news. Clients stay tuned: Our analysis will be available on Forrester.com tomorrow. — UPDATE: CLIENTS CAN NOW READ THE ANALYSIS HERE.