What is Microsoft Thinking (comments regarding the acquisition of LinkedIn)?

This week we were told that Microsoft had purchased a popular social network called LinkedIn. 

LinkedIn does for social media and employment what Facebook has done for families and relationships. It has the potential of transforming the manner in which firms hire new recruits as well as define how employees keep older ones. Interestingly for LinkedIn, was the purchase of lynda.com an online training platform that delivers popular software and design application training across the Internet. This new development for the social media platform was probably an idea as to what it's planners saw in its future. LinkedIn differs from Facebook in that you are probably not going to get too far with your cat images and goofy profile pics. It allows you to test and gauge the skill levels of connections (what Facebook calls friends or what twitter calls followers). It also allows you to keep track of possible future employers as well as increase your level of knowledge in your field of interest ( this you do by aggregating professional articles from experts or creating your own). 

Now Microsoft's DNA varies massively from that of its new rivals notably Facebook and Google both of which were born from what can be referred to as Internet driven technologies (search and social). Both groups emerged and developed these ideas from which other revenue generating  avenues emerged. For google this meant a little more money in mail, then social, later on hardware (chrome books) and software for mobile (android). Facebook on the other hand seems to see a lot more potential in three dimensional platforms as well as augmented reality. We have written briefly about the same and imagined a world in which both technologies are married and then merged into Hollywood-like projects where for example, users could integrate themselves into movies of their choice past or present as lead characters or with augmented reality work their way into previously done material. We suspect that Facebook has other ideas in mind though. We have seen some interest from the same in the creation of and support global Internet rollouts across third world countries as well as discussion around the design of a free Internet. We might see the emergence of development around the FB platform that might encourage the input of developers. As things stand now, much more has been used in the support and acquisition of mobile messaging platforms like whatsapp. Whether FB chooses to launch out into hardware is an idea for another day. It would be tempting to imagine a world in which a phone or laptop (or intermediate device) is powered by a FB ready platform that has inbuilt social capability and much more say in the augmented and 3D areas. 

Microsoft differs because it has depended too heavily on previous successes and taken severe beating from regulators and governments both in the U.S and in Europe. 

The trend that both Microsoft and Google are depending on, is the idea of conglomerations. That is the creation of service and product clumps like mail (online and standalone), search, hardware, clouds, online software, messaging, operating systems and much more. So acquisitions have been made of those who have excelled in any of the areas in which the giants have seen potential.

The challenge that both giants face though, is that innovation and creativity are driven by lack. The two have tended to create based on an availability of excess cash and the inevitable push from shareholders. The smaller companies that have ended up acquiring on the other hand, have done the grunt work and endured through the struggle to create companies and products which have later become noticeable. How the small merge with the large will determine how much success takes place in the future. 

The question that Microsoft needs to ask especially about the purchase of LinkedIn is really about worth. As can be expected the market has benefitted from the purchase. In these African lands if the chief selects a village girl as his bride, she will become increasingly attractive to her former colleagues! 

Would the purchase of Yahoo been much better. Given the 1billion or so users that access the site every month? From what was discussed before they would have spent much less for this and probably gained a little more in terms of users and potential revenue.