CTEC 205 The Phuc Dinh (Mike)

The Phuc Dinh (Mike)

Date: Oct 18h

Class: CTEC 205

Professor Adam Coleman

Case Study 9: LinkedIn’s History (Pages 372-373)

9-10. Why is growing the number of users such an important metric for social media companies? How does
Metcalfe’s Law relate to the profitability of social media companies?

The number of users is one of the key indications to determine the success of a company’s customer base.
Growing this number, social media companies can generate more revenue by allowing other companies to
advertise on the site. The social media companies also can generate revenue by selling premium accounts as
a service product. That is why growing the number of users is an important metric for social media
companies.

According to the text, Metcalfe’s Law emphasizes that the value of a social network is proportional to the
square of the number of connected users of the system. Because social media companies can earn more
revenue from advertisers and from selling their service product, the value and the profitability of this
company will be increased when they have more users. This means the number of users will generate the
value and the profitability of social media companies

9-11. Most social media companies rely on ad revenue as their main source of income. What are other
ways that LinkedIn generates income? Why is it important for a company to have multiple ways of
generating income?

According to textbook page 352, Besides ad revenue, LinkedIn earns part of its revenue by selling upgrades
to its standard software as a service product. As of May 2018, standard users access LinkedIn for free;
individual upgrades range from $29 to $99 a month and offer advanced search capabilities, greater visibility
of user profiles, and more direct email messages to LinkedIn users outside one’s network. Moreover,
businesses have a demand to use LinkedIn for recruiting can purchase a Recruiter Corporate account for
$120 to $1200 a month. LinkedIn’s revenue consists of about 17 percent from premium subscriptions, 65
percent from online recruitment, and only 18 percent from advertising.

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A company needs to have multiple ways of generating income because it reduces the risk of depending too
much in one way to generate income. If the income of one source drops, other sources can cover and become
a new main source to make revenue. Additionally, when a company has multiple ways of generating income,
they will have many potential directions to develop the company in the future, not just based on one direction.

9-12. Why do recruiters and job seekers like LinkedIn? Explain why an employer may dislike LinkedIn. Is
there a strategic disadvantage to having your employees list detailed profiles on LinkedIn?

Recruiters and job seekers like LinkedIn because they can expand their career connections. From that,
recruiters can have more choices in looking for good candidates. Job seekers can see many job posts and get
a higher chance to have a good job. Knowing lots of people and companies in the same industry also helps
them understand the labor market better. Finally, both recruiters and job seekers can build their professional
reputation through LinkedIn over time.

An employer may dislike LinkedIn because they need to pay a fee when using LinkedIn services such as
recruitment service or premium account payment. Another point is that the information posted on LinkedIn
is public. Employer’s information can be viewed by the competitors. This can be an issue when using
LinkedIn.

A strategic disadvantage to having employees list detailed profiles on LinkedIn is the risk of leaking
information. For example, the detailed job description may reveal some key roles or processes that
competitors can copy from you. Moreover, LinkedIn generates revenue through advertisements. It means
that advertisers can access users’ data and collects users’ information. That is not good for the users.

9-13. LinkedIn targets a specific demographic: working professionals. They tend to be older and better
educated. Why might advertisers be more interested in this group over others?

There are some reasons that advertisers might be more interested in this group over other groups. The first
reason is that advertisers offer a product to serve this specific demographic. With that said, they can contact
a relevant source of potential customers. Second, these users may have many connections with people that
having the same background. If the product is good, then there is a higher chance to sell it to more people.
Additionally, almost all people who have a LinkedIn account are companies, people has a job or people on
the way to get a job very soon. This means that they have a good financial condition to buy goods. It will be
easier to sell a product to people who have the demand and have money to buy.

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9-14. Microsoft creates software focused on supporting businesses. LinkedIn focuses on creating a
platform for business professionals. Does the acquisition of LinkedIn make sense? What type of synergies
could come from integrating products from these two companies?

According to the test, the acquisition of LinkedIn rises many concerns at that time because it is not sure that
the two companies be better together than apart or not. However, I think when Microsoft acquired LinkedIn,
it not only gained access to a popular social media network but also part of business intelligence. LinkedIn
is a social media company that has a very good core value, so I believe this acquisition makes sense.

According to CEO Jeff Weiner, Microsoft and LinkedIn could integrate products as below directions:

1. Incorporating LinkedIn’s identity and network in Microsoft Outlook and the Office suite
2. Supporting LinkedIn notifications within the Windows action center
3. Enabling members drafting résumés in Word to update their profiles and to discover and apply to
jobs on LinkedIn
4. Extending the reach of Sponsored Content across Microsoft properties
5. Powering Enterprise LinkedIn Lookup by Active Directory and Office 365
6. Making LinkedIn Learning available across the Office 365 and Windows ecosystem
7. Developing a business news desk across the content ecosystem and MSN.com
8. Redefining social selling through the combination of Sales Navigator and Dynamics 365

Some above ideas allow Microsoft users much greater reach on LinkedIn. Nearly every corporation uses
Microsoft products. If LinkedIn is successfully integrated across all Windows products, LinkedIn will have
a greater reach and more frequent contact with end users. As a result, that could lead to the rapid growth of
its userbase and its profitability.

9-15. How would the integration of LinkedIn into the Microsoft Office Suite be beneficial?

Microsoft has developed it easier for professionals to build and manage their business relationships. The
users do not have to leave Office 365 and connect to LinkedIn. It was integrated into Microsoft office for the
users. Some examples are below:

1. The Resume Assistant in Microsoft Word: help users to create effective resumes by providing content
suggestions to include in the users’ resume. Based on the role and industry the users are interested in,
they will receive suggestions regarding work experience summary, skills, and also other relevant
content available on LinkedIn.
2. Profile Cards in Outlook: allow you to view someone’s job history, skills through Outlook

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3. Microsoft and LinkedIn Graph: a cloud-based API that facilitates the integration of Office 365 and
LinkedIn. It’s also designed around a self-learning algorithm. With the LinkedIn integration, you get
deeper and real-time insights on jobs, co-workers, learning...

9-16. How would enabling draft résumés in Microsoft Word to update connected LinkedIn profiles be
beneficial?

Enabling members drafting résumés in Word to update connected LinkedIn profiles would enable users to
discover and apply to jobs on LinkedIn. There is The Resume Assistant in Microsoft Word that also can help
the users create effective resumes as mentioned above.

9-17. Suppose you are advising Microsoft about future acquisitions. Which company would you
recommend as a good acquisition? Why?

I recommend Microsoft acquire Adobe. What I do research on the Internet, there are many reasons to believe
that this will be a good acquisition for Microsoft. Microsoft and Adobe are two companies working in the
same industry, so they share some common background. They can help both companies create more value
for their integrated products. According to Forbes Magazines, below are some potential areas:

1. In Digital Media, Adobe’s Creative Cloud fits in well with Microsoft’s Office and Game Pass
offerings. While Photoshop and Dreamweaver are strong graphic products, the Document Cloud
readily ties in with the Office suite.
2. Adobe’s Experience Cloud aligns well with Azure, Bing and Office 365.
3. The advertising and marketing clouds within the Experience Cloud can amplify the up-selling
potential across Bing and Office products.
4. Adobe’s Publishing products can easily be incorporated across Microsoft’s Office and Dynamics
product lines.

With that said, this will be a good investment for Microsoft.

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Works Cited

Advergize, et al. “What Are the Disadvantages of Linkedin.” Advergize, 29 Sept. 2019,
https://advergize.com/marketing/disadvantages-of-linkedin/.

“Integrating Office 365 and LinkedIn: Features and Benefits.” SherWeb, 8 Aug. 2019,
https://www.sherweb.com/blog/office-365/office-365-linkedin-integration/.

Team, Trefis. “Microsoft Can Acquire Adobe, Provided It Doesn't Balk At $260-Billion Price Tag.”
Forbes, Forbes Magazine, 23 Sept. 2019,
https://www.forbes.com/sites/greatspeculations/2019/09/23/microsoft-can-acquire-adobe-provided-it-
doesnt-balk-at-260-billion-price-tag/#e732b7948a96.

Using Resume Assistant in Microsoft Word | LinkedIn Help,

https://www.linkedin.com/help/linkedin/answer/85812/using-resume-assistant-in-microsoft-
word?lang=en.

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