In the leadup to its acquisition of LinkedIn in 2016, Microsoft promised to take a deliberate, hands-off approach to integrating the business social network with its own products, learning a lesson from past blunders. So far, Microsoft has followed through on that pledge. But has the Redmond company been too slow to capitalize on the largest deal in its history?
In an interview with LinkedIn CEO Jeff Weiner, CNBC noted that only two of six major potential integrations discussed in a presentation when the $26 billion 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. Promised integrations that have yet to materialize include a news feed on LinkedIn with activity from Office apps, and LinkedIn Learning integration with Office.
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.
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.