LinkedIn Hopes For Soft Link With Microsoft

Can LinkedIn maintain its independence under the Microsoft umbrella?

Jeff Weiner hopes to keep Microsoft at arm’s length.

When Jeff Weiner first joined LinkedIn in 2008, it was, in his words, “to massively scale LinkedIn’s membership and business, both of which had the potential to fundamentally transform the way the world connects to opportunity.”

LinkedIn’s $26 billion acquisition by Microsoft just might enable Weiner to achieve that goal, as the combined strengths of its professional network and Microsoft’s professional Cloud services offer tantalizing opportunities for both companies. Microsoft will benefit from the data provided by LinkedIn’s 400 million professionals and jobseekers, which is both real-time and managed by the users—LinkedIn member details are incredibly valuable, and Microsoft will seek to leverage and enhance that value. LinkedIn, meanwhile, will benefit from financial stability, a much larger clientele and new business features.

In an email to LinkedIn staff, Weiner says the unique way in which the acquisition will be structured will allow LinkedIn to control its own destiny: Weiner will remain CEO and will report directly to Microsoft CEO Satya Nadella rather than the Microsoft board.

How much control that leaves with LinkedIn remains to be seen.

“Selling your company is always emotional, and Weiner will be torn in two. To maintain LinkedIn’s identity and pursue his independent vision for it, he has to avoid integration, [but] for Microsoft to get any value out of LinkedIn, it will need to integrate,” says Daniel Domberger, a partner at M&A and debt advisory firm Livingstone Partners who co-leads the global media and technology team. “The synergy case is pretty thin even with integration; without it, it’s a hollow reference to cross-selling.” Microsoft’s ecosystem of over a billion customers plus tools such as Outlook, Calendar, Active Directory, Office, Windows, Skype, Dynamics, Cortana and Bing presents Weiner with prospects to create new solutions for LinkedIn users. But he won’t be as free as he was before. As Domberger notes: “You can’t sell in an all-cash deal and expect to retain your independence, whatever the press release says.”