In the lead up to its blockbuster acquisition of LinkedIn in 2016, Microsoft promised to take a deliberate, hands-off approach to integrating the business social network, perhaps due to several recent acquisition blunders. So far, Microsoft has followed through on that pledge; however, the cautious strategy has led to a more gradual integration of the companies’ products and services.
CNBC noted in an interview with LinkedIn CEO Jeff Weiner that only two of six major potential integrations discussed in a presentation on the day the acquisition was announced in 2016 have come to fruition: A tie-in between LinkedIn’s Sales Navigator and Microsoft Dynamics sales software and integrations between LinkedIn profiles and Office apps.
Weiner said the companies haven’t abandoned plans for deeper integrations, but are instead taking their time to get things right, both in terms of new features and LinkedIn’s larger assimilation into Microsoft.
“We have a members-first approach,” Weiner told CNBC. “So it’s all about making sure we’re maintaining the trust of our membership. Microsoft has a very similar ethos with regard to how they secure the data of their customers, and just being very thoughtful in terms of the right way to roll this out and make sure that we create the right experience. So there’s just been a lot of testing happening.”
Here are integrations mentioned in the 2016 investor presentation that have yet to materialize publicly:
- An “Intelligent Newsfeed” in LinkedIn that includes activity from Office apps.
- Organizational directory information for Microsoft’s digital assistant Cortana.
- Tools for managers to understand employees’ workloads and activity.
- LinkedIn Learning content inside Office applications.
Microsoft’s more deliberate approach to LinkedIn — and the $7.5 billion GitHub acquisition too — reflects a push to erase a checkered past when it comes to major deals. Five years after buying aQuantive in 2007 to compete with Google’s online advertising business, Microsoft wrote down the acquisition as a loss, spurring CNNMoney to call the deal “Microsoft’s $6 billion whoopsie.”
Microsoft agreed to acquire Nokia’s struggling devices division for $7.2 billion in 2013 to bolster its smartphone hardware push. But that deal backfired as well, and in 2015 the company took more than $8 billion in charges to write down the acquisition.
Last year, Microsoft President Brad Smith said the company has learned to use its vast resources to help new acquisitions and then get out of the way.
“What we learned from the LinkedIn acquisition is that when we invest our resources to help somebody do an even better job of what they were doing already, they can grow faster,” Smith said.
LinkedIn has reported steady growth since being acquired by Microsoft. CNBC notes that LinkedIn contributed $6.75 billion in revenue in the 2019 fiscal year, which ended June 30, up 28 percent over the year before. Membership has grown 52 percent to 660 million users since the Microsoft acquisition.
In the interview with CNBC, Weiner noted that LinkedIn’s performance for the last three years is ahead of expectations, and being part of Microsoft has allowed it to take a more long-term approach, instead of worrying about quarterly results. Microsoft, Weiner said, has fulfilled the promises it made during the acquisition, primarily its pledge to let LinkedIn operate independently.
“Satya has made good on every single thing we talked about prior to the acquisition,” Weiner said.