Opinion: What does Microsoft's acquisition of LinkedIn mean for the two brands?
Earlier this week, one of the biggest online acquisitions of the decade was announced. In a surprise move, Microsoft confirmed it would invest a huge $26bn in purchasing business-based social network LinkedIn – a move described by LinkedIn's co-founder Reid Hoffman as an “incredible opportunity” and a “re-founding moment."
Over the past 10 years, Microsoft has splashed huge amounts of cash to bring names such as Skype, Nokia and Minecraft-creator Mojang, into its ever increasing collection of acquisitions. However, the purchase of LinkedIn will eclipse all of its previous deals, with the $26bn astronomically higher than the previous high of $8.5bn, spent on Skype.
What does this deal mean in terms of brand architecture, brand strategy, brand perception and employer value proposition (EVP) for both Microsoft and LinkedIn?
When it comes to brand architecture, how will LinkedIn integrate itself into the big world of Microsoft? Microsoft has many names under its brand, some of which have seen the parent company added to their title, others barely acknowledging the connection.
It’s a well-known fact that Microsoft is annoyed that Xbox, of which it is the creator, isn’t typically associated with the masterbrand. What will Microsoft do with LinkedIn to ensure the same thing doesn’t happen? It’s unlikely there will be a change in naming, but in corporate communications, Microsoft may try to attach its brand to LinkedIn.
On the front-end of things, will users see a change? Microsoft could add its logo at the top of the page, in a 'LinkedIn brought to you by Microsoft' sort of way (as per the Xbox example), or there could be no impact whatsoever, other than maybe a mention in the small print copyright text at the bottom of the page (as in the case of Skype). It's rather unlikely that the two brands will integrate under the Microsoft umbrella.
In terms of brand strategy, the two companies align ideally. Microsoft is now about empowering people and organisations to achieve more, something that slots in perfectly with the aims of LinkedIn, which focuses on connecting people and organisations with opportunities. This is something both CEO of Microsoft Satya Nadella and LinkedIn CEO Hoffman managed to get across in the press release announcing the acquisition and in emails to their staff.
With such a great match on the brand strategy level, can the same thing be said about the companies' EVPs? What sort of changes might happen behind the scenes at LinkedIn, once the Microsoft deal is completed towards the end of the year? In its statement, Microsoft promised that LinkedIn would retain its “Distinct brand, culture and independence.” However, anybody who has ever worked for a big corporation will be aware that it’s quite unlikely that in the mid-to-long term future LinkedIn will stay truly independent. Microsoft probably will impose its culture, maybe unintentionally, and will definitely try to integrate processes in order to find mythical synergies and at some point will introduce additional reporting lines for LinkedIn’s employees. This will lead to the unification of the companies' EVPs and because of that, we could see people leave LinkedIn as they will find themselves as part of something completely different to what they signed up to.
Something quite important for the future of LinkedIn under its new leadership, is how people will perceive the brand. For Microsoft, it’s nothing but a good move. People will see them as the kings of software and online business, with not only giants such as Skype and Xbox under their umbrella, but now the biggest professional social network in the world.
For LinkedIn, the outlook probably isn’t as good. Any time there’s a well-publicised takeover of a popular brand, users start to doubt the company and worry about any changes to what they’ve become used to. When Facebook added WhatsApp to its portfolio, hives of WhatsAppers worried that the messaging app would change, and the simplicity and privacy they were on board with would be pushed aside by the new owners. A similar story is when Yahoo acquired Tumblr – it helped Yahoo perception-wise (for a short period though), but definitely didn't help Tumblr. The same concerns are likely to be shared by regular users of LinkedIn, who rely on the service during their day-to-day business. With the independence of LinkedIn likely to dwindle, how will Microsoft change the network, and will it be good news for the users of the service?
Let's all hope it will make it more reliable and bug-free, but only time will tell if this is the case.
Magda Adamska is the founder of BrandStruck, a brand strategy database.