Welcome back to the riveting conclusion of the SoLoMo series. For the past few months here on the LT blog, we’ve been surveying the search industry by looking through the lens of how social, local, and mobile trends have impacted the biggest players. In parts one and two, we pulled back the curtains on Google and Facebook - just enough to suggest that they’re not as evil or dead as people seem to think. Yes, that’s right: The better part of 7,000 words were spent arguing that these two leaders are NOT a pair of malicious zombies.
The trickiest part of critiquing such a lopsided landscape has been that there’s not a clear number three in this finale. Every time there seemed to be a target to profile, someone has emerged from the pack to completely muck things up. At first, the plan was to cover the increasingly perilous future of Yelp, crack a few cheap jokes about Amy’s Baking Company, and call it a day.
But oh no, not so fast. Right as I thought we were done here, Microsoft had to drop the bombshell that it’s acquiring LinkedIn in an eye-popping $27 billion transaction. On the surface, it looks like the inane purchase of a milquetoast social platform by a larger, once revolutionary, now extraordinarily dull organization. I’d like to think there’s a little more to it than that.
If you happen to count “having overly enthusiastic and unfounded opinions on tech M&A transactions” as a hobby, then this, my good friend, was a gift from above. Also, I welcome you to the club. We meet on Thursdays and next week’s topic is: "Things You Can Buy With $4.8 Billion That Don’t Rhyme With Kazoo." See you there!
Let’s look at this perfect match made in corporate heaven, complete with a calendar invite and timely “Thank You” email follow-up.
2015 in Review - So where do you see yourself in five years?
It’s easiest to start with Microsoft’s perspective in order to see why this ultimately makes sense.
The big story last year was how current CEO Satya Nadella essentially wiped a notable decision of his predecessor, Steve Ballmer, from the books. Immediately after the new Clippers owner announced he’d be leaving in September 2013, Microsoft went ahead and acquired phone maker Nokia for about $7.9 billion.
Fast-forward less than two years to the summer of 2015. Nadella made the call to take an impairment charge of $7.6 billion for that acquisition, essentially labeling Ballmer's decision as a lost cause. That came along with the announcement of 7,800 layoffs in the phone group, and was on the heels of 18,000 company-wide departures the previous year. Redmond sounded less cheery as it does in Douglas Coupland's Microserfs.
What Nadella has been praised for, before and after that decision, is a commitment to Microsoft becoming a leader in cloud-based enterprise support. This has long been in the company’s DNA: After all, Windows is software, and Microsoft still carries scars from its hardware screw-ups. If you owned a Zune (those odds are low) or were visited by the Xbox 360 Red Ring of Death, you should know what I’m talking about.
So Microsoft has realized its most viable identity, and is hanging its hat on selling software as a service (or SaaS if you’re in to business school acronyms). The stakes are high - Azure, its cloud product, competes directly against the growing gargantuan that is Amazon Web Services. Building out an attractive offering of services that businesses will cling to, and most importantly, pay a high premium for, has become a flat-out arms race. Call it the "Intuit Effect."
That dynamic lies at the core of Microsoft’s decision here. In fact, LinkedIn wasn’t even plan A. It only became the target after negotiations broke down with Salesforce, who makes a hell of a lot more sense as a partner. The namesake customer relationship management (CRM) platform and ExactTarget's email automation are already established moneymakers. What good does integrating a social media network serve?
Social - Strengths? Well, first would have to be my professionalism...
LinkedIn is an odd duck when compared to its social counterparts. I like to think that if all the modern social platforms were characters at a party:
LinkedIn's professionalism can be taken a few different ways. On one hand, as Alyssa Bereznak over at The Ringer put it, LinkedIn has never lent itself to the "Weird Internet" that makes for entertaining social irreverence. She rather eloquently observed:
"It’s not that people don’t use it. (LinkedIn has more than 400 million members globally and is a wildly popular tool among job recruiters.) It’s that generally people loathe using it. It both magnifies the meaningless pleasantries that one must go through during a job search and encourages a bland professionalism that feels unnatural to the Internet."
The thing is, social media is where we go to escape. It’s nothing more than unwinding. I think that's what has made LinkedIn inherently uncool - we socialize online in an attempt to get away from our mundane work lives; we don't necessarily want to dive deeper into them.
But, there's a rare group of people who do want to leverage social connections online for professional purposes. In fact, they'll even pay for it. They call themselves “recruiters."
Local - I swear, I know you from somewhere...
Recruiting is an inherently difficult job. Not too long ago, people actually interacted in the physical realm and made businesses decisions, like buying and hiring, based on personal relationships. That hasn’t necessarily disappeared, but just like with how we view our real world vs. digital friendships, the dynamic of it has completely changed. The wealth of information that comes with the Internet has led to a distant, ruthless automation that Microsoft is now attempting to access via LinkedIn.
When covering Alphabet/Google/the antagonist in Resident Evil, I touched on how the voice-to-text movement is a crucial part of the larger artificial intelligence strategy that appears to be all the rage right now. There’s a similar force at play here with how LinkedIn will be folded into what Microsoft ultimately has in mind. The thing is, they didn’t have to be so creepy about it:
This is absolutely hilarious, on so many levels. I’ll kick it over to the brilliant Matt Levine at Bloomberg to put it into better words than I ever could:
"The archetypal joke about the deal is an image of the old Microsoft Clippy saying "I'd Like to Add you to My Professional Network on LinkedIn," but Microsoft and LinkedIn, two companies that are impervious to humor, have embraced the same idea. That bubble is Cortana -- Microsoft's digital assistant, sort of a natural-language mobile Clippy -- tapping into poor Jen's LinkedIn network to advise her on her real-life work interactions. "I see you plan to interact with a human," bleats Cortana. "Have you considered talking about your shared interest in sports?" It combines Microsoft's legacy chirpy intrusiveness with LinkedIn's grim determination to pester you with boring information about your acquaintances.
It's such a good idea! Microsoft and LinkedIn are the great software companies of work, of boredom, of getting on the calendar to schedule a meeting. Work is an essentially social activity; it is among our most important social activities. But most work software -- even collaborative interactive whatever software -- does not fully honor that social component; it helps you share the slide presentation but not your love for the Huskies. Meanwhile, a lot of social networking software seems to be designed by, and intended for, people who have never had real jobs. "Make your selfie look like a cartoon dog" is a functionality that I suppose appeals to the tweens craved by advertisers. But, to a certain demographic, "chat up this stranger about Pac-12 football so that he signs a lucrative consulting contract with your company" is far more exciting"
Read that, and then read it again, and then think for just a second. Have you ever logged on to LinkedIn for fun? If you happen to be Snapchatting your potential clients, I’d reckon you’re doing something wrong.
It’s clear that Microsoft envisions programming the typical water cooler conversation of, "Hey, how’s the team doing?” into a more colloquial online format for those in sales and recruiting. That’s nice and all, but it's definitely not the type of synergy you should be spending $27-effing billion dollars on. Especially when the market is starting to turn against that new favorite toy.
The current state of job searching online is such a crapshoot that people forget there’s a whole, you know, human element to eventually getting hired. While I don’t necessarily agree with all of this Inc article, there’s a good point buried in it:
"This kind of automated outreach points to what experts expect to see soon from recruiting technology: Advanced outreach specifically tailored to specific candidates and based on more than the employment and education information they've listed on the Internet. And we can expect to begin answering a big question: Will human managers ever be fully removed from the recruiting and hiring process?"
The answer to that rhetorical question is a resounding: NOPE. If you’re interviewing for a job, and the entire hiring process consists of a few emails and a conversation over the phone, there’s a good chance you’re walking into a pyramid scheme. I don’t mean to sound like a traditionalist, but c’mon people. You should expect to meet your potential employer in person.
Mobile - Don't look for a job on your phone.
LinkedIn’s mobile app sucks, and based on the billions wasted on acquiring Nokia, Microsoft clearly hasn’t figured out how to leverage mobile technology. There’s not much to say here other than: “This likely won’t go well."
With that being said, I’m going to abandon this section to get sentimental about this whole SoLoMo experiment (I’m sorry about the name, I really am, I hate it too.)
I'd like to give thanks to anyone who suffered through reading all of this series (Hi Mom and Dad!). I had originally set out to write 10,000 words covering all of these search magnates, but it’s become abundantly clear that the search industry moves way too fast to keep up with. Everyone is innovating too damn quickly.
In conclusion, I implore you, dear reader, to go find a phone book. Like, an actual physical actual tome of 250 yellow pages. I’ll pause while you try and track one down.
For the sake of this exercise, I’m going to pretend you happened to stumble upon one. Answer me this: Where’s the best sushi spot nearby? What about a reliable 24-hour plumber? Is that pizza place on the corner open until 2:00 a.m?
Are any of these questions easily answered with that useless piece of garbage?
We now have the opportunity to find whatever we’re looking for in a matter of seconds, in the palm of our hands. It’s all thanks to these rather difficult corporations. I don’t necessarily know if that’s a good or bad thing, but they certainly make it convenient. As we move forward, the same search technology we rely on is going to get more and more invasive. It’s going to want to know who we are, where we go, whom we talk to, and how we want to find something when we’re in need. Being aware of this fact is critical, however uncomfortable that may be.
Good luck searching out there ya'll. Thanks for reading.
