Microsoft has stunned the world of social media with its announcement of an AU$35 billion acquisition of business-oriented platform, LinkedIn.

For years, LinkedIn has been viewed as the boring and conservative side of social media, but that hasn’t prevented the Mountain View company from accumulating around 430 million members to its database.

 

 

Microsoft, which has been consistent in its ability to miss market trends over the last decade, appears to have come in very late to bring in a company that is near full maturity. However, it may be this maturity that CEO Staya Nadella considers so valuable, and worth shelling out more money than Microsoft has ever spent on an acquisition.

 

 

The reason might be quite simple. Microsoft’s cash cow is its Office suite, which is the absolute dominant player in the enterprise space and, subsequently, on privately owned desktops and laptops.

 

Microsoft CEO Staya Nadella

 

Being able to integrate Office with LinkedIn could be a masterstroke. Having all your LinkedIn connections immediately made a part of your MS email clients (Outlook or Entourage) locks users into an increasingly valuable network. A LinkedIn connection could be made via the mobile app and the parties could easily send a quick email to follow-up.

 

 

It’s interesting to see Microsoft’s strategy unfurl. A recent move to provide a mobile-friendly subscription-based Office 365 has certainly shored up many of Microsoft’s users (a per month payment is more manageable for users and is a more guaranteed revenue stream for the company) and has gone some way to staving off threats from free options including Google Docs and FreeOffice.

 

LinkedIn: NYSE (1M - Bloomberg)

 

With LinkedIn becoming part of the fold, Office might maintain its position as the go-to solution for business workflow and communications… for a little while longer, anyway.