How Microsoft Office 365 Will Benefit from LinkedIn Acquisition


Jun. 16 2016, Updated 4:06 p.m. ET

Microsoft’s Office 365 will get a push from LinkedIn acquisition

Previously in the series, we learned that Microsoft (MSFT) aims to incorporate LinkedIn (LNKD) into its Productivity and Business Processes segment, which is comprised of the cloud version of Office, Office 365, and the traditional version of Office.

Microsoft will likely incorporate LinkedIn into its Office 365 products, as Microsoft is aggressively pursuing the cloud space to achieve growth. It primarily generates its cloud revenues from Office 365, Dynamics CRM, and Azure, its cloud-computing platform.

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With freelancing becoming common, it’s likely that Microsoft with its machine learning technology, when fused with LinkedIn’s database of professionals and freelancers, could provide a significant push to Office 365. Here, Office 365 offerings could save time and money by recommending candidates for a job or project.

In a recent press release, Microsoft stated, “Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet.”

Microsoft’s Office 365 continued its upward growth trajectory in fiscal 3Q16

Though the office suite space is dominated by players like Microsoft, Google (GOOG) (GOOGL), Salesforce.com (CRM), and Box (BOX), Microsoft’s Office 365 continues to show steady and consistent growth. Microsoft stated that Office 365’s subscriber base grew by 79% YoY to 22.2 million in fiscal 3Q16, up from 12.4 million in fiscal 3Q15.

Investors looking for exposure to Microsoft might consider investing in the Technology Select Sector SPDR ETF (XLK). While XLK invests ~10.6% of its holdings in Microsoft, it also has ~38% exposure to application software.


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