Microsoft's Pending LinkedIn Acquisition Ignites Both Fear and Optimism
Microsoft is hoping to finalize its acquisition of professional social networking giant LinkedIn by year's end. But it still has a key hurdle to meet -- gaining approval from European Union regulators. Salesforce CEO Marc Benioff, which was unable to outbid Microsoft's successful offer to acquire LinkedIn for $26.2 billion, is trying to convince the EU it shouldn't approve the deal, arguing it will stifle competition.
While it has already cleared regulatory approval in the United States and other countries, the EU is expected to decide by Dec. 6 to either clear the deal or to delay it pending further investigation. A report by Reuters on Nov. 16 revealed that Microsoft officials last week met with EU regulators and offered concessions. The report, citing unnamed EU officials, said details weren't provided but they'll share the concessions with competitors and customers.
Benioff has complained to regulators for some time since the deal was first announced by both companies in mid-June. In late September, Salesforce Chief Legal Officer Burke Norton told CNN in a statement that "Microsoft's proposed acquisition of LinkedIn threatens the future of innovation and competition. By gaining ownership of LinkedIn's unique dataset of over 450 million professionals in more than 200 countries, Microsoft will be able to deny competitors access to that data, and in doing so obtain an unfair competitive advantage."
Amid the latest hurdles, I was among four participants in a panel discussion Tuesday night in New York City and again Wednesday morning in Woodbridge, N.J. at a meeting of Microsoft's partners. The meeting was planned a while back to discuss if, and how, Microsoft partners might benefit from the deal.
In advance of the meeting, I shared results of the Redmond magazine survey we conducted and shared in our August cover story. About 20-plus attendees were at both meetings, held by the local chapters of the International Association of Microsoft Channel Partners (IAMCP) -- and some were hopeful the integration of LinkedIn's large pool of data and social graph will open new opportunities for them such as offering new capabilities on the Dynamics CRM suite to make it easier to sell and market to customers.
Among those bullish about the potential of the deal is Eric Rabinowitz, CEO of Nurture Marketing, who organized the panel discussion and recruited me to participate along with Jeffrey Goldstein, founder and managing director of Queue Associates, a Dynamics integrator, and Karl Joseph Ufert, president of Mitre Creative, a New York-based digital agency that works with various Microsoft partners.
Rabinowitz uses LinkedIn today to mine his clients' "circle of influences," he explained. "We look at our clients, go into LinkedIn and look at what surrounds them, who their peers are, who they report to and who reports to them," Rabinowitz explained. "Then we harvest that information and get e-mail addresses for those people. And instead of marketing to one person in an organization, we reach their whole circle of influence. What's beautiful about the Microsoft acquisition, I think what I just described will all be there at the push of a button."
Asked later if he was concerned that this capability would marginalize his business, Rabinowitz argued to the contrary. "Right now, it's a labor-intensive service that does not make us much money," he said. "If it's a service then what Microsoft will do for us is improve our service, gaining improved results. Also, I can envision us packaging the service into something else we do."
Others, though, are concerned that once Microsoft absorbs LinkedIn, resulting services could put the squeeze on their own offerings, depending on how they're priced. That's specially the case for those who offer virtual software training services. Lisa Eyekuss, president of Corporate Training Group, based in Iselin, N.J., shared her concerns, especially if Microsoft bundles LinkedIn's Lynda.com training service with Office 365 subscriptions. "If they include it, then Microsoft just slapped the face of its partners who do all the end user training because it's the first item in the budget to be cut."
While she takes some comfort in having diversified her business in recent years, Eyekuss is wondering to what degree Microsoft will slash the cost of Lynda.com to Office 365 subscribers. "I know it will affect our business," she said. "We have to figure out how to stay away from it."
It also remains to be seen to what degree Microsoft will integrate LinkedIn data, including contacts and the newsfeed, with Office 365 and the new Microsoft Teams (announced earlier this month), as well as ties to the new Dynamics 365 business suite, particularly CRM. Goldstein said he believes it will add much richer capabilities to the CRM stack. Goldstein said he is hoping Microsoft shares more specifics as soon as the deal closes -- presuming the EU doesn't delay it. "I'm excited and I don't know why," he said. "The only thing I do know is if Marc Benioff is upset about this acquisition and is trying to block it, it's got to be good," he said. "There's got to be something there."
Posted by Jeffrey Schwartz on 11/17/2016 at 10:17 AM