Nadella says LinkedIn will continue to run independently

Nadella says LinkedIn will continue to run independently

A different approach compared to Skype and Yammer acquisitions

There's a lot of questions about Microsoft's $26.2 billion purchase of LinkedIn, questions both companies' chief executive tried to head off in respective letters to their teams (and the public).

And in Satya Nadella's letter, he made very clear that LinkedIn would still be LinkedIn, running fairly separately from the mothership:

A big part of this deal is accelerating LinkedIn’s growth. To that end, LinkedIn will retain its distinct brand and independence, as well as their culture which is very much aligned with ours. Jeff will continue to be CEO of LinkedIn, he’ll report to me and join our senior leadership team. In essence, what I’ve asked Jeff to do is manage LinkedIn with key performance metrics that accrue to our overall success. He’ll decide from there what makes sense to integrate and what does not. 

That sentiment was echoed in Jeff Weiner's own memo:

Long story short, Satya had me at “independence.” In other words, his vision was to operate LinkedIn as a fully independent entity within Microsoft, a model used with great success by companies like YouTube, Instagram and WhatsApp. I would remain as CEO and report directly to him instead of a board. Together, along with Reid, Bill Gates, my former colleague Qi Lu, and new partner Scott Guthrie, we would partner on how best to leverage this extraordinary combination of assets while pursuing a shared mission.

It's interesting what previous acquisitions are not being pointed to in those two memos: Skype, Yammer, and the numerous other Microsoft purchases that were deeply integrated with the main company.

According to Recode, there's internal frustration about how well those integrations actually worked:

While Nadella said he thought that the purchases of social networking service Yammer in 2012 and communications service Skype in 2011 had worked well, others inside and outside Microsoft point to those deals — both done under former CEO Steve Ballmer — as less than ideal. Leaders from both those acquisitions have left the company and the services have been heavily integrated into existing businesses and more focused on revenue than becoming bright centers of innovation. Neither has seen the growth they were once famous for.

“They have been integrated to death,” said one person inside the company, who noted that the use of their brand names did not mean that the promise at the time of their purchase had been realized.

It will be fascinating to watch how well this new approach works (arguably it's one that Microsoft took with its Mojang/Minecraft acquisition, but that's still a little outside of the business world for now). I have a feeling people will be saying "It's a new Microsoft" quite a bit this year.

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