Bits: What Microsoft Needs From LinkedIn

View in [Browser] | Add [nytdirect@nytimes.com] to your address book. Friday, December 9, 2016 [The New York Times] [For the latest updates, go to nytimes.com/bits »] [The New York Times] Friday, December 9, 2016 [Satya Nadella, chief of Microsoft, at a shareholders meeting in Bellevue, Wash., last month. He has made a series of smaller deals that have shown positive results.] Satya Nadella, chief of Microsoft, at a shareholders meeting in Bellevue, Wash., last month. He has made a series of smaller deals that have shown positive results. Elaine Thompson/Associated Press [Daily Report] LinkedIn is a site where workers memorialize their professional lives and look for new careers. Now, after its recent purchase by Microsoft for $26.2 billion, one good measure of the merger’s success may be how few LinkedIn employees start using their own product. As Nick Wingfield [writes], the deal enters a pantheon of big Microsoft acquisitions, many of which have largely failed. How could this one be different? The failed acquisitions of companies like aQuantive ([a $6 billion deal, in 2007]) and Nokia, ([$7.2 billion, 2013]) seem like deals that were meant to help Microsoft catch up in businesses like online search and mobility. In both cases, that strategy appeared not to work. The companies, bought by Steve Ballmer, the previous Microsoft chief executive, were hauled up to Microsoft’s headquarters outside Seattle, where they never fit in. (In fairness to Microsoft’s methods, that’s also what happened with Skype, an $8.5 billion [deal] made in 2011 that is regarded as a success.) As Nick writes, LinkedIn is more like the 2014 [purchase] of Mojang, the maker of the popular game Minecraft. Neither was that acquisition meant to make up ground in an existing industry, nor did it result in the acquired company being uprooted. In LinkedIn’s case, the current Microsoft chief Satya Nadella appears to be happy to let it stay on its own turf, with as much of the existing team as possible remaining in place. In other words, they will be home and happy instead of out on LinkedIn, looking for another job. But there is more to it than that with LinkedIn, and not just because the purchase is more than three times the size of the Skype deal — previously Microsoft’s biggest purchase — or because of the site’s popularity as a job-hunting tool. Mr. Nadella is taking Microsoft from its roots in software for personal computers and computer servers into the new era of cloud computing and mobile devices, increasingly with artificial intelligence acting as an intermediary. LinkedIn matters to Microsoft for both the A.I. talent it has on its staff and the huge amount of data it holds on its users. A.I. generally works better when it has large and varied data sets from which to draw information. LinkedIn’s vast collection of data is, in fact, why Salesforce, which was once [courting] with Microsoft over its own possible acquisition, now [objectsÂ]to the purchase of LinkedIn. For Mr. Nadella to succeed, he doesn’t need LinkedIn to be a part of Microsoft, in the sense of being deeply grafted into the rest of the company. He needs it to keep growing, building up data, and holding on to talent. In other words, he needs it to be the best LinkedIn possible. — Quentin Hardy  Related [With LinkedIn, Microsoft Looks to Avoid Past Acquisition Busts] By NICK WINGFIELD The technology giant has not had a great track record with the companies it acquires. The hope is that it has learned from its mistakes.  ADVERTISEMENT  More From The Times Your Money [Hertz customers exiting a shuttle at Los Angeles International Airport on Thursday.

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