Microsoft’s Reckless Decision to Acquire LinkedIn

Microsoft plans to change the flavor of LinkedIn from a mere data junkyard to an enterprise utility for its customers.

By Rakesh Raman

Microsoft Corp. and LinkedIn Corporation on Monday announced they have entered into a definitive agreement under which Microsoft will acquire LinkedIn for $196 per share in an all-cash transaction valued at $26.2 billion, inclusive of LinkedIn’s net cash.

LinkedIn will retain its distinct brand, culture and independence. Jeff Weiner will remain CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft.

Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner both fully support this transaction, it was announced. The transaction is expected to close this calendar year.

Although LinkedIn claims it has 433 million members worldwide, it’s extremely difficult to ascertain the authenticity of these claims. Almost all free social networks like LinkedIn and Facebook exaggerate the number of users on their sites.

In fact, there is no independent and accurate web traffic measurement service that can vouch for such claims. While some users hardly visit the social networking sites after registration and some have even died, but these sites keep counting them as their members.

Plus, the quality of users on LinkedIn and Facebook is pathetic. Most Facebook users are idle junkies and LinkedIn only has desperate job seekers. There is no useful or professional networking happening on these social sites. You can read the following articles to know more about this fact.

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LinkedIn also claims that it has more than 105 million unique visiting members per month, 60 percent mobile usage, 45 billion quarterly member page views, and over 7 million active job listings. But again there is no substantiation for these numbers; these are only LinkedIn’s claims.

These grossly inflated numbers are used to hoodwink the users, online advertisers, and buyers. And in the current case, Microsoft, which is fast losing its focus from the traditional software business, is being fleeced by LinkedIn.

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“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said. “Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet.”

Microsoft plans to change the flavor of LinkedIn from a mere data junkyard to an enterprise utility for its customers. But that is going to be an uphill task because most enterprises don’t possess proper communication skills to effectively use a public messaging platform such as LinkedIn. Microsoft will soon repent its reckless decision. Keep watching.

By Rakesh Raman, the managing editor of RMN Company