About Microsoft

Microsoft’s Acquisition of LinkedIn

Microsoft is a firm whose main product is software tools used as business solutions. Similar to Facebook, LinkedIn is a cloud-based social networking service for professionals. Microsoft enhanced its acquisition of LinkedIn in order to bring together users of these professional tools and share professional experiences and expertise on the cloud gathered by LinkedIn. This was done in order to connect the professional network socially and enhance sharing of this professional knowledge alongside use of professional tools developed by Microsoft.

The Financial Recovery of LinkedIn

Comparing LinkedIn’s cost per share to other similar cloud-based websites like Amazon, it had seen a decline in its share over time. This merger allowed LinkedIn to recover from a definite financial meltdown with a newly share value at $196 as opposed to $106, just almost fair enough for its shareholders. Based on the different acquisitions made by Microsoft, products that lie out of the scope of Microsoft’s core product have most commonly been registered as failures (Wingfield n.p.).

CAGE Distance Framework Analysis

Using the CAGE distance framework, an analysis will be done to determine if the strategy of Microsoft to buy LinkedIn was indeed a right step towards the betterment of the company, based on the fact that LinkedIn and Microsoft both deliver cloud-based solutions. The paper will look at how distance affects industries or products. This merger was facilitated mainly by the fact that both Microsoft and LinkedIn offer cloud-based solution products and that as Microsoft offers programs like Microsoft Office which are tools to ease work of professionals, LinkedIn increases the association of these professionals (Wingfield n.p.).

Cultural Distance

Based on the CAGE distance framework, Cultural distance is diverse. Different LinkedIn users from across the world can be facilitated since both companies have products customized to the different languages that suit their clientele base. Both LinkedIn and Microsoft tools will flawlessly interact with both applications offering related services on the cloud.

Administrative or Political Distance

For Administrative or Political distance, both products are existent internationally although there is a question as to whether the privacy of LinkedIn users is guaranteed with the integration of Microsoft, especially when job seekers are in need of jobs and are communicating with job creators (Wingfield n.p.). This comes as a threat to the security of the users of both applications.

Geographical Distance

Studying Geographical distance shows that for both LinkedIn and Microsoft tools, the integration is mainly with regards to providing business or professional solutions to the users of Microsoft tools. Already, LinkedIn had registered over 400 million users, with this addition to Microsoft tools; there is a growth in the market or distribution to non-Microsoft users or non-LinkedIn users. Ideally, both companies are to benefit from this merger.

Economic Distance

The economic distance is non-existent as these applications both serve the professional market. Therefore, the tools developed by both Microsoft and LinkedIn only connect two economies together even to build a greater ease to the working environment, refine ideas and generate a social network of skills from the job seekers and creators.

The Success of the Merger

From the analysis done, since both companies seek to offer professional solutions, there is a likely success as anticipated for a rise in the share value for Microsoft by 2019 with a minimal negative impact (Wingfield n.p.). Microsoft should in future concentrate even more on mergers with companies that lie within the same line as their core product. Mergers with Skype, Nokia are evident to have registered significant losses. Even though LinkedIn was registered as the most expensive deals Microsoft engaged in recently, this was a good step forward as it increased their clientele base and eased the control of the users of Microsoft tools with the professional world together. There are LinkedIn users who were not using Microsoft tools. This merger allows professionals on LinkedIn to communicate and share knowledge through the use of Microsoft tools, thus, advancement for Microsoft as a company. Based on the CAGE framework, Microsoft’s decision to buy LinkedIn was a major decision as there was proper analysis of the different cultures, Economies, Geographical distance and Administrative distance. Most of the variables in the CAGE framework allowed for the merger to take place and favored flourishing to benefit Microsoft.

Work Cited

Wingfield, Nick. “Microsoft Buys LinkedIn for $26.2 Billion, Reasserting Its Muscle.” The New York Times, The New York Times, 13 June 2016, www.nytimes.com/2016/06/14/business/dealbook/microsoft-to-buy-linkedin-for-26-2-billion.html.