Vende Buzz: Did Microsoft save LinkedIn and Microsoft?

by Ray Larson
  |  June 22, 2016  |  
June 22, 2016

Once upon a time, there was a huge company that won every ballgame. They were the champions of the league but one by one…people stopped coming to their games. Microsoft was on such a path.

Kind of a weird way to start but that company was Microsoft. Think of the ballgame as the computing industry.

As we know, Microsoft was “the” guy at one time. Everything we knew about computers came from Microsoft – but now, not so much. While most business documents are still produced in Microsoft, the company has become all but an afterthought – an assumption. Rude, but true.

MS programs are still vital in “computers” – but a growing number of us don’t even use computers anymore and the market is diminishing thanks to the mobile market and millennials. It won’t go away any time soon – but it isn’t growing.

The electronic world is so different now that even the name has changed. It isn’t called electronic – or even computing – it’s now the “digital world”. All this means that unlike Microsoft nemesis, Apple who slid right into the new, digital world…Microsoft was big, lumbering, blue-chip and missed the i-world opening. Add to that, they didn’t even see the rise of social media.

Though Apple doesn’t have the biggest chunk of the smart market, the i-products are both device and software. Competitor Android is much more widely used as a licensed software on many devices – but both systems are highly innovative. Belatedly, Microsoft tried to enter the smart-device market but there wasn’t much of an uptake – hardly a wrinkle and no room for growth.

The mobile market is pretty much saturated – as nearly everyone above the age of 12 in the U.S. already has a smartphone. Frankly, Microsoft’s attempt at that was feeble at best and only got worse. Seriously, do you even know anyone who has a Windows phone? We don’t. In the U.S., Android and Apple split that pie with 52% and 41% respectively. Globally, the picture looks a little different – but MS still has no game. Windows comes in at a meager 3% and falling and they don’t have a device to sell.

Strike one and Ball one for Microsoft.

Google is the next big name in the digital world as dominator of search. Microsoft has one of those too…Bing. But really, Bing? The only way most people currently use Bing is that annoying period when, after downloading software, the user realizes they were tricked into setting it as the default search engine. That lasts only until that user figures out how to make Internet Explorer accept Google again. IE and Bing are both MS products so even though it’s skeezy, you can see how that happens. Anyway, Bing is generally considered inferior to Google – way inferior.

Strike two for Microsoft.

The new (not really new) frontier is social media and Microsoft has no player in the game at all.

Ball two.

It is non-news that Facebook dominates. Until a couple of years ago, Twitter and LinkedIn were 2 and 3 but both have been leapfrogged by millennial-savvy Instagram and female-friendly-fun Pinterest (sorry, YouTube doesn’t count and we don’t know really know if Reddit or Tumbler actually qualify). Snapchat and WhatsApp are right on the tail of that game.

Twitter is facing its demons but LinkedIn has had a different problem – a kind of stodgy, old-guy feel. LinkedIn is pretty much necessary for career professionals…at least those over 30 but it isn’t fresh or exciting.

Rude again right? Still true.

LinkedIn has had some rough times recently. In February, like the temperature in Texas, stock plummeted 43.6 percent in one, single day (winter humor) leaving a lot of stock holders shivering. Stock analysts have been quick to point out that LinkedIn has a much lower growth profile than other social media platforms.

LinkedIn’s business model is a little different, as much of the revenue is driven by premium membership subscriptions and its hiring business, Talent Solutions. Advertising does drive a portion of that revenue – but they missed that forecast big time. The analysts were also way-off in their predictions…due to jobs reports which have been mediocre at best and bad if you consider the real numbers. Hiring doesn’t bring as much in when there are no jobs…as in now,

Stay with us as we call that “ball three” in our game.

Even after the February sell-off for LinkedIn, analysts didn’t expect it to get any better, saying the stock was still overvalued. So what, said Microsoft when they bought the company, last week (causing the stock to jump back to pre-storm prices).

LinkedIn works well for Microsoft – who has switched most everyone to monthly or annual software subscriptions rather than occasional purchases. After their failed attempt at the purchase of Salesforce, they have been building their own CRM system.   The computer guys (PC World and others) have been saying that even though it isn’t “sexy”, LinkedIn’s data will make the CRM system “Dynamics” better – possibly more valuable than that number one company they tried to buy. That same data will reportedly improve the uptake of Cortana (the virtual assistant no one cares about).

There may be some slight usefulness with a Bing combination too. We kind of scoff at that idea since we aren’t a big fan but some people are scared of Google so…Bing is the much-smaller-but-second most popular search engine. There is also ome talk about Outlook replacing LinkedIn Messaging and Skype (owned and kind of forced upon the MS user) can facilitate video meetings and Lynda courses suggested by LinkedIn – as well as some future ad invasion of Office.

A little ad revenue here, a little there, subscriptions here, subscriptions there, forced participation here, forced participation there…still adds up to money. Microsoft won’t ever compete with the Instagram crowd. They just aren’t exciting, requiring a much longer attention span.

And again, rude but true.

Link to Microsoft’s purchase of LinkedIn on TechCrunch.

Point is:

The Microsoft and LinkedIn combine may have prevented a strikeout.

Millennials don’t care about Microsoft but, they aren’t the only game yet. Microsoft has 2.5 million customers, LinkedIn has 430 million – not all of whom use Microsoft on a routine basis and Bing is used by at least some people. Put them all together and there may be some room for growth, particularly with business professionals. Will it be enough to make everyone a bunch of money? Probably not but it may be enough to stop the decay.

Everyone (including us) talks about millennials, as if impressing them is “everything”. While they are fresh, new, high volume users of digital, they aren’t the whole market – or even half, yet. There are about 75 million millennials but You don’t “get” the millennials? Don’t worry, many of them don’t get each other.

There are still 70 million Baby Boomers – who will rightfully remind you that they aren’t dead. There are also about 66 million Gen-Xers. That makes 136 million consumers who are way easier to predict. Millennials won’t outnumber BB+GenX until about 2035 and oh, wait…Generation #hashtag will be entering establishment years by then.

Unless you are selling video games, smartphone apps or do something with anime…they aren’t on the radar – they don’t wear matching socks yet. (at least they wear shoes…).

You still need to go mobile-first and employ social media marketing to reach the older-than-34 set but you may not need Instagram yet and a robust LinkedIn strategy may make a lot more sense.

Identify your target market – and go where they are.

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