• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

Now That Microsoft-LinkedIn Has EU Approval, the Heavy Lifting Can Begin

The EU's conditions for approving the deal do little to change hefty potential value to Microsoft's empire. But executing on the opportunity will take some work.
By ERIC JHONSA
Dec 06, 2016 | 10:41 PM EST
Stocks quotes in this article: MSFT, LNKD, AAPL, GOOG

Though they've come down hard on Apple  (AAPL) and Alphabet's Google (GOOG) recently, EU regulators applied a softer touch to Microsoft (MSFT)  in its $26.2 billion deal to buy LinkedIn (LNKD) .

With the EU's conditions for approving the purchase likely to have little impact on the deal's value to Microsoft, the stage is now set for the software company to tightly integrate the world's top professional social network and its data on several fronts.

In line with past reports, the European Commission is approving the LinkedIn deal in exchange for three Microsoft "commitments":

  • A promise to let PC makers refuse to bundle LinkedIn with Windows if they wish, and to let users uninstall it should it be bundled.
  • A guarantee that rival professional social networks will maintain the same level of access they currently have to Microsoft Office plug-ins and the productivity suite's programming interfaces (APIs).
  • A promise to let rival professional social networks access the Microsoft Graph, which allows businesses and developers access a variety of files and data from Microsoft's cloud apps and services (including Office 365).

It's unlikely Microsoft's brass is sweating any of these conditions. There's little incentive for PC makers to choose not to bundle LinkedIn, particularly if Microsoft goes through with its plans to develop professional content feeds for Windows users that feature LinkedIn material. Likewise, unless LinkedIn proves very intrusive or distracting right out of the box, most Windows users will see little reason to uninstall it.

And any reference to "rival" professional social networks probably needs to be in quotation marks. LinkedIn's giant user base (467 million registered members, with about a quarter of them visiting monthly) gives the company a natural monopoly in most of the big markets it operates in, just as Facebook claims one in most markets when it comes to networking with family and friends. Granting would-be challengers access to Office 365 APIs and the Microsoft Graph won't do anything to change this.

Now that EU approval is official, Microsoft expects to close the LinkedIn deal within a few days. Which means it's now on Microsoft to make good on its ambitious long-term plans to use LinkedIn to strengthen its empire, and in doing so, help prevent the deal from being the kind of multibillion dollar blunder the Nokia and aQuantive acquisitions proved to be.

Creating Windows news feeds that pair LinkedIn feed data with content and notifications obtained from Microsoft apps such as Outlook and Skype for Business will certainly be part of the effort. There's also an opportunity to use LinkedIn data to make the Cortana assistant services found in Windows and elsewhere more intelligent -- for example, letting users know more about those whom they're working or meeting with.

Meanwhile, apps such as Word, Skype for Business and Outlook can (with the help of AI) proactively surface LinkedIn data whenever it's relevant, and more generally rely on LinkedIn profiles to provide an "identity layer" for users. Microsoft also has plans to integrate LinkedIn's learning services (the product of the Lynda.com acquisition) with Office.

LinkedIn's Sales Navigator (social selling) and Recruiter services can be integrated with Microsoft's Dynamics 365 cloud business app suite, and sold via Microsoft's huge salesforce and reseller network. Microsoft could also leverage its AI and business intelligence software strengths to provide companies with LinkedIn-powered tools that help them obtain more insights about their workers and external talent.

Microsoft's Bing search engine could show publicly accessible LinkedIn content within search results, and perhaps also use LinkedIn's professional data for ad targeting. And Microsoft's engineering and web design teams could help provide a facelift for LinkedIn's oft-criticized user experience.

A lot, though not all, of these benefits will be hard to precisely quantify. That will make it tougher to figure out how financially successful the LinkedIn acquisition is than it was to gauge the financial success (or lack thereof) of something like the Nokia deal.

It's not a stretch, however, to think that the value-add LinkedIn can provide to Microsoft's existing properties could run well into the billions, if Microsoft executes in a way that it hasn't always done with past acquisitions.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio . Want to be alerted before Cramer buys or sells AAPL? Learn more now.

TAGS: Investing | U.S. Equity | Technology

More from Technology

The Charts Point to More Selling Ahead for 4 Former Tech Leaders

Ed Ponsi
Jul 1, 2022 10:00 AM EDT

Keep in mind that no matter how much a stock has fallen, it can always go lower, and it appears these four stocks could prove that point.

Want to Save Your Retirement Fund? Tune Out the Talking Heads

Jim Collins
Jun 30, 2022 3:14 PM EDT

The first half of this year has been ugly. But we could have seen what would happen to Netflix, Tesla and Meta...

Is Pinterest's CEO Change Good News? It Depends on How You Look at It

Eric Jhonsa
Jun 30, 2022 2:30 PM EDT

Plus, why a report about an Apple 5G modem setback sounds believable.

Barring a Major Recession, Some Chip Stocks Look Very Cheap Right Now

Eric Jhonsa
Jun 30, 2022 11:45 AM EDT

Many quality chip stocks now seem to be pricing in a massive downturn, rather than just a typical down-cycle.

Oracle Continues to Struggle to Make a Durable Low

Bruce Kamich
Jun 30, 2022 8:20 AM EDT

Let's review the charts and indicators.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 07:59 PM EDT PAUL PRICE

    Very good quarterly numbers from Bassett Furniture (BSET)

    Bassett Furniture (BSET) blew right through analys...
  • 04:41 PM EDT PAUL PRICE

    First Half Results - Putrid Second Half Results - Likely to Be Much Better

    It's great that we're done with June. 2022 marked...
  • 04:51 PM EDT PAUL PRICE

    We Should Be in for Better Starting Soon

    Window dressing Thursday, the last day of the...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login