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Wand Labs, Microsoft’s Latest Acquisition: What Will It Offer?

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Wand Labs is the latest Microsoft acquisition

Earlier in this series, we discussed how Microsoft (MSFT) outbid Salesforce (CRM) for the LinkedIn (LNKD) acquisition.

This did not come long after Microsoft announced its largest acquisition to date. To acquire LinkedIn, Microsoft agreed to pay $26.2 billion. However, it seems Microsoft wasn’t yet satisfied and was looking to add more companies to its portfolio.

On June 16, 2016, Microsoft announced that it acquired Wand Labs, a messaging app developer. Financial details of the deal were not disclosed. At its Build 2016 conference, Microsoft shared that the Wand Labs buyout was in sync with its “strategy for Conversation as a Platform.”

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What the Wand Labs acquisition offers Microsoft

Wand Labs’ expertise revolves around “semantic ontologies, services mapping, third-party developer integration and conversational interfaces.” As a result, it will be a good fit for Microsoft’s Bing engineering and platform team, especially for its intelligent agents and chat bots. Moreover, Wand Labs’ team of natural language processing experts could be instrumental in improving Microsoft’s Cortana digital assistant and related chat bots. Recently, Microsoft shared that Gartner has recognized it as a leader in its Magic Quadrant for Business Intelligence and Analytics Platforms report for the ninth consecutive year.

Investors who wish to gain exposure to Microsoft could consider investing in the PowerShares QQQ Trust, Series 1 ETF (QQQ) and the iShares Russell 1000 Value ETF (IWD). QQQ and IWD have exposures of 28.4% and 3.4% to application software, respectively, and invest ~8.4% and 2.0% of their holdings in Microsoft.

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