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Microsoft's (MSFT) LinkedIn Inks Deal to Acquire Drawbridge

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Microsoft’s MSFT LinkedIn recently inked an agreement to acquire Drawbridge, a startup based in San Mateo, CA.

However, the financial terms of the deal have been kept under wraps. Notably, per Crunchbase data, Drawbridge raised around $68.7 million in funding as a private entity.

Drawbridge’s Identity platform loaded with intelligent targeting capabilities is a key factor behind the deal. The startup leverages first-party data to assess customer’s journey with Drawbridge Identity graph to provide robust marketing insights.

Drawbridge’s Strength in Intelligent Marketing Solutions

Per the deal, LinkedIn aims to enhance Marketing Solutions platform by integrating Drawbridge’s consumer identity technology capabilities. This is expected to aid LinkedIn in enabling customers to better target professional audience and improve returns on ad campaigns across desktop and mobile.

Founded in 2011, privately held venture capital-funded company boasts of a notable customer base comprising Adobe ADBE, salesforce, IBM, Oracle ORCL, and LiveRamp RAMP, among others.

Apart from Identity Platform, Drawbridge offers RichQuery API, and other CRM optimization, authorization and data security solutions.

Growing Clout of Customer-Centric Marketing Holds Promise

Data is being leveraged strategically to obtain customer oriented marketing solutions and target specific audience. This allows companies to reduce advertising costs effectively. Growing popularity of virtual assistants, social media is fueling the need for AI-driven intelligent marketing solutions.

In fact, per MarketsandMarkets data, AI in marketing market is projected to hit $40.09 billion by 2025 from $6.46 billion valuation in 2018 at a CAGR of approximately 29.8%.

Drawbridge acquisition is anticipated to aid LinkedIn to fortify its platform with targeted ad marketing solutions. Per the company, “LinkedIn Marketing Solutions has accelerated growth to 46% year-over-year in revenue.”

We believe that enhanced engagement with Drawbridge acquisition will drive LinkedIn’s revenues, consequently favoring Microsoft’s top line.

Microsoft Corporation Revenue (Quarterly)

Microsoft Corporation Revenue (Quarterly)
Microsoft Corporation Revenue (Quarterly)

Microsoft Corporation revenue-quarterly | Microsoft Corporation Quote


Notably, in the last reported quarter, LinkedIn revenues surged 27% from the year-ago quarter (up 29% at cc) to approximately $1.7 billion (or 5.5% of total revenues). LinkedIn sessions were up 24%, reflecting acceleration in engagement.

Wrapping Up

Microsoft is striving to enhance its LinkedIn platform with robust AI, CRM capabilities at different levels, while maintaining user data privacy preferences.

LinkedIn is strengthening employee management tools (Glint buyout) and advancing marketing strategies by adding small players with promising capabilities, which favors growth prospects.

Robust performance of LinkedIn’s subscription products comprising membership, recruitment and education programs remain key catalysts.

Zacks Rank

Currently, Microsoft carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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