Microsoft will benefit from LinkedIn's massive personal database, but privacy risks remain

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When Microsoft announced its plan on Monday to purchase LinkedIn, the largest social site for professionals with more than 400 million users, its primary goal seemed clear: Access to data.

The purchase will give Microsoft access to professional job searches, organizations, training through Lynda.com, and more. And the two companies seem to be a perfect fit—job-seekers can have advanced professional tools, and Office-users can have tailored help from professionals.

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“How people find jobs, build skills, sell, market and get work done and ultimately find success requires a connected professional world,” wrote Microsoft CEO Satya Nadella in an email to employees. “It requires a vibrant network that brings together a professional’s information in LinkedIn’s public network with the information in Office 365 and Dynamics.”

How, exactly, will the partnership help professionals? “This combination will make it possible for new experiences such as a LinkedIn newsfeed that serves up articles based on the project you are working on,” said Nadella, “and Office suggesting an expert to connect with via LinkedIn to help with a task you’re trying to complete.”

SEE: Why Microsoft just bought LinkedIn: It’s all about the data (ZDNet)

Mark Skilton, a professor at Warwick Business School, sees “the role of ‘talent management’ becoming increasingly critical to enterprises,” and the growing importance of “human resources platforms that can bridge the commercial world of work activities and the knowledge sharing and collaboration that defines modern digital economy.”

“The acquisition is a logical response to competitors such as Salesforce.com and Workday in human resource management who have realized the importance and rise of social network collaboration in modern connected enterprises,” said Skilton.

But, the acquisition also prompts questions: What information, exactly, is Microsoft interested in? How will it use the personal data from the networking site? Are there risks to integrating the information from the formerly separate entities?

“What makes this acquisition interesting and potentially impactful vis-a-vis privacy is that Microsoft is essentially buying the world’s second largest personal database,” said Dimitri Sirota, cybersecurity expert and CEO of BigID, a company that works with clients to protect customer data.

“To make this acquisition successful,” Sirota said, “they will have to show how this personal data can enrich the software offerings from Microsoft in areas as far flung as CRM, communication, collaboration, productivity etc.”

Skilton also sees Microsoft integrating LinkedIn’s network “with enterprise productivity tools; more specifically, growing and using the rich business networks of data for extending its CRM reach.”

SEE: Microsoft is buying LinkedIn for a whopping $26.2 billion in big data push (TechRepublic)

With the use of all this personal data, questions around privacy remain at the forefront.

“Given that the value of the purchase will derive from the usage of personal data it will be natural to ask how this data usage gets governed so it doesn’t compromise either personal privacy or many privacy regulations,” said Sirota.

It’s an issue many companies must grapple with around big data, he said.

“The problem of how one of the world’s largest software companies uses one of the world’s largest personal databases parallels the problem every company has to contend with when it comes to big data: Organizations gain tremendous marketing, sales, and intelligence value from collecting and aggregating as much customer data as they can, but the tools to govern the privacy risk and compliance of the aggregated ‘identity’ data are only now being developed,” said Sirota.

Skilton also worries about risks that may come along with the integration of personal profile information across formerly separate entities. Although LinkedIn currently has an obligation to manage personal data according to the terms of service, Microsoft could take over the data in a transfer of user agreement rights with new terms of use outlined. At that point, said Skilton, “Microsoft could start to analyse and market this data.”

Other cybersecurity experts urge caution, as well.

“Any time large databases are merged, unanticipated interaction in data may lead to loss of privacy,” said Roman Yampolskiy, director of the University of Louisville’s Cybersecurity lab. “Both Microsoft and Linkedin represent such large databases and it would not be surprising if their merger resulted in undesired consequences for the users.”

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