I’m just back from Denver, where I spoke on data-driven customer success and marketing to groups of software executives. It was the same week that Microsoft acquired LinkedIn. In other words, good timing to talk about engineering products so that marketing is built right into those experiences…which is a big driver of Microsoft’s strategy.
Many pundits have called on Microsoft to retain LinkedIn’s autonomy and to not bake it into the mother ship in overtly commercial ways. But when you buy a company for $26 billion, you can bet there are big plans for for synergies.
It begs the question, how will Microsoft monetize their new prize?
One clue lies in looking at the competition, Google and Apple. Those companies have engineered their products to created an ecosystem, so that using one product naturally leads into using another product. (For example, Apple’s Facetime connects users on Ipads, Ipods, Iphones and Macs, which is why my kids make fun of me for using an Android phone when I have a Mac computer).
Microsoft has traditionally not been great about building a product ecosystem. Expect that to change. According to Chris Caposella, Microsoft’s Chief Marketing Officer, their strategy involves four parts: acquire, engage, enlist, and monetize. Acquire is Microsoft’s way of getting people to use a product for free. Engage is Microsoft’s plan to get them hooked on the product and leverage other parts of its ecosystem to keep someone using the service. Enlist is simply finding fans to keep the circle going, and then monetizing is figuring out who will pay for subscription versions of the service they’re hooked on.
So, for example, the LinkedIn integration may include:
- Improving Office, with LinkedIn connections. E.g. preparing emails to a sales prospect and seeing all your connections at that company (and dozens of other use cases). Office is a big part of Microsoft’s $6.7 billion productivity and process business, which needs a boost. Their revenues were down 2% last quarter.
- Improving Microsoft’s CRM offering, by including connections with companies. If CRM is ultimately about managing relationships, what better vehicle for that than an existing social network with its built-in insight about who is connected to whom? You can imagine LinkedIn features with hooks into Microsoft’s CRM, and vice versa, and new freemium offerings.
- Making LinkedIn more of a workflow tool by embedding Microsoft functionality like OneNote (their note taking app), so LinkedIn users can easily see and share their ideas and thoughts — on any device — as part of the LinkedIn experience. In other words, if Microsoft tools can make LinkedIn more useful, then LinkedIn’s hooks into Microsoft products will be even more valuable. Their goal should be to make this a virtuous cycle. They have already begin embedding OneNote into SurfacePro 3, for example.
- Data mining to improve user engagement, cross-sells and up-sells across the Microsoft product suite (or at least parts of it). LinkedIn is a data machine. When you combine millions of users with data on relationships, content preferences and professional education (via Lynda.com), Microsoft should be able to monetize LinkedIn in ways LinkedIn as a standalone company was not able to.
In a broader sense, there are ways to build an ecosystem around your company, even if you don’t have a software product. Here are some thoughts on doing that the “Google Way” in one of my previous articles. It’s all about getting closer to the center of your customer’s universe.
As always, I welcome your thoughts.