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  2. June 2016

June 2016

Microsoft to Acquire LinkedIn for $26.2 Billion

Microsoft, in what is by far the biggest acquisition in the company’s history, said it had reached a deal to buy LinkedIn, the professional social-networking company, for $26.2 billion in cash. Integrating Microsoft’s and LinkedIn’s offerings would broaden their reach, enhance their utility, and create market-leading services for business customers, the companies said. Microsoft said LinkedIn will “retain its distinct brand, culture and independence,” with Chief Executive Jeff Weiner remaining at the helm, reporting to Microsoft CEO Satya Nadella. The deal is expected to close within the year. The companies see cost savings of about $150 million a year by 2018.

Microsoft believes the acquisition will expand the market for both LinkedIn and Microsoft’s Office products. The software giant has made a significant push in the past few years to make its products more connected and wants to use data to make them more intelligent. LinkedIn’s vast network offers data that could help. Connecting LinkedIn directly to Office could help attendees of meetings learn more about one another directly from invitations in their calendars. Sales representatives could pick up useful tidbits of background on potential customers from LinkedIn data. Microsoft is betting that the combination of Microsoft and LinkedIn services will make workers more productive by revealing connections and data that might otherwise take additional steps to find. That could increase the value of Office to customers, and helps explain why Microsoft made the deal.

Why is Microsoft buying LinkedIn?

Microsoft just surprised the world with its LinkedIn acquisition. Valued at $26.2 billion, it's a huge price to pay for a social network, and it tops the charts as Microsoft's biggest-ever acquisition. As Microsoft CEO Satya Nadella's first major acquisition, the success or failure of LinkedIn will define him as the leader of Microsoft's increasingly service-driven future. While many are surprised at the cash figure, the question on everyone's lips is, why does Microsoft want LinkedIn?

Nadella's internal memo does a good job of providing a basic outline to partially answer that question, and more. Nadella points out that LinkedIn is "how people find jobs, build skills, sell, market and get work done." It's a key tool in the professional work space, with 433 million members and more than 2 million paid subscribers. Microsoft itself has more than 1.2 billion Office users, but it has no social graph and has to rely on Facebook, LinkedIn, and others to provide that key connection. LinkedIn provides Microsoft with immediate access to more than 433 million members and a solid social graph that, thanks to its professional nature, is matched closely with the software and services Microsoft provides. In the same way that most kids play Minecraft, it's reasonable to assume most adults in the US use LinkedIn for finding jobs, connecting with colleagues, or just general work-related networking.

Why Americans are still waiting for our first tech president

[Commentary] As Donald Trump, Hillary Clinton and Bernie Sanders have shown, any candidate hoping to connect with voters in the 2016 election can’t do so without a strong online presence. But embracing the Internet as an organizing tool isn’t enough. To become the nation’s first genuine tech president, a candidate must also champion Internet policies that safeguard users and ensure the network’s survival and continued growth.

On June 13, a coalition of public interest organizations that played leading roles in these policy fights will release the 2016 Internet Policy Platform and send it to the leaders of both major parties, including their presumptive nominees, as a roadmap to becoming America’s first tech president. The platform has been endorsed by more than a dozen Internet rights, social justice and consumer advocacy organizations, including 18 Million Rising, ColorOfChange, Demand Progress, Free Press, the National Hispanic Media Coalition, New America’s Open Technology Institute and Public Knowledge. We built the platform around six guiding principles supported by millions of Americans who have become forceful advocates for internet rights. These principles – free speech, access, choice, privacy, transparency and openness – are what make the Internet a democratic medium like no other. They must be upheld by anyone seeking elected office – not just our next president. The Internet isn’t just a tactical tool for campaign organizing. Candidates need to pay attention to Internet users and protect the interests of everyone who’s fighting for policies to keep the network open, secure and available to everyone.

[Timothy Karr is the senior director of strategy for Free Press.]

Cable Industry Mobilizes Lobbying Army to Block FCC Moves

In recent weeks, staff members for Rep Bobby Rush (D-IL) have asked fellow lawmakers to sign a letter opposing a Federal Communications Commission proposal to limit how broadband providers can share users’ personal data. In May, 60 lawmakers signed a separate letter voicing their objections to an FCC regulation that would open the market for cable television set-top boxes. What the actions have in common: the financial connections and legwork of cable companies like Comcast. The National Cable & Telecommunications Association, an industry lobbying group, said it had edited the letter shared by Rep Rush’s staff.

Cable industry lobbyists also helped gather the 60 signatures on the set-top-box letter; nearly all of the lawmakers who signed count cable and telecom companies as top campaign donors, according to federal disclosures. The behind-the-scenes activity by cable companies and their industry groups is part of the biggest lobbying push by the $115 billion industry in Washington since 2009, when the government drew up its net neutrality rules. These days, the cable and telecom industries are hiring more lobbyists, issuing warnings that they may sue federal agencies, and making speeches and writing scathing blog posts about policy makers. The trigger? A string of proposed regulations by the FCC that has left cable companies feeling besieged.

How Set-Top Rules Would ‘Lower the Tide’ for PEG

[Commentary] As the executive director of the public-access center serving Fairfax County (VA), I have been closely following the reaction to the Federal Communications Commission’s proposed set-top box rules and have concern regarding the likely consequences of these rules. Public, educational and government (PEG) access executives and leaders should recognize the need to join the creative unions (SAG, AFTRA, IATSE), the Directors Guild of America, the Communications Workers of America, programming copyright holders (including the major movie studios), the Congressional Black Caucus, the multichannel video programming distributors (MVPDs, or pay-TV) themselves and others in opposing the set-top rules before the FCC issues a final order on this matter.

Yes, the reduction in fees that subscribers currently pay to MVPDs for monthly set-top boxes would have an immediate negative financial impact on those PEG entities that receive a percentage of those fees; however, more importantly, if issued in a final FCC order, these rules would jeopardize the current ability of MVPDs to create the above discussed enhanced customer experiences through new, innovative set-top boxes. That would most likely result in significant damage to the cable industry as a whole, lowering the tide for all involved. The above, coupled with legitimate concerns regarding the ability of third-party set-top boxes to secure copyrighted programming, ad overlays and the utilization of subscriber information obtained via third-party boxes, should cause concern for the very health of the cable industry. Cable provides a unique means for PEG centers to connect with our communities — a unique means of community connection that would be terribly diminished if the industry contracted due to the proposed set-top box rules. To many in the PEG community, at first glance, the proposed “unlock the box” rules appear to be very positive, but there are negative consequences for the PEG creative community should these rules be issued in a final order by the FCC.

[Chuck Peña is executive director of Fairfax Public Access in Fairfax County (VA).]

In “an unusual move,” US government asks to join key EU Facebook privacy case

The US government has asked to be joined as a party in the Irish High Court case between the Austrian privacy activist and lawyer Max Schrems, and the social network Facebook. Schrems called this "an unusual move." He said that there are no documents relating to the "amicus curiae"—friend of the court—request yet. "The US government simply appeared via a barrister at the first (administrative) hearing today," he said. "They will be able to file the documents until the 22nd."

Schrems speculated that the US government has made this move because it wanted to defend its surveillance laws before the European Courts. "I think this move will be very interesting," he said. "The US has previously maintained that we all misunderstood US surveillance." The Court of Justice of the European Union struck down the Safe Harbour agreement between the EU and the US largely because of fears that personal data sent from the EU to the US would be subject to US surveillance without sufficient safeguards. The latest move seems to be an attempt by the US government to convince European courts that personal data is adequately protected when it is transferred to the US. But as Schrems notes, the US government's bold approach carries risks. "Compared to diplomatic talks with the EU and EU member states, as well as public statements in the United States, it will not be protected by US laws on confidentiality and be placed under oath," he wrote. "The party that gives evidence on behalf of the US government could therefore face severe consequences, if he does not truthfully answer all questions raised on US mass surveillance."

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