Photo Credit: Microsoft
There’s still nobody talking about Microsoft being one of the biggest social media companies. That, despite the fact that the Seattle-based company continues to make high-profile acquisitions to consolidate its position in the social media world. Arguably, the biggest and splashiest deal was the $26.2 billion acquisition of LinkedIn back in 2016. And, before that, there was the $8.5 billion deal to acquire Skype back in 2011.
Well, Microsoft is back in 2021 with two more high-profile acquisitions – a $7.6 billion deal to acquire gaming company Zenimax in March, and then a new deal in April to acquire speech recognition company Nuance for $16 billion. These two deals, of course, follow on the heels of Microsoft’s much-hyped attempts to acquire social media star TikTok for $30 billion at the end of 2020. There were also rumors heading into this year that Microsoft was getting ready to buy online chat app Discord for close to $10 billion. So what’s going on here, and why aren’t more people talking about Microsoft?
Nuances of the Nuance deal
There are, of course, several different ways that Microsoft could choose to leverage all of these acquisitions. If you buy into the argument that speech recognition is going to be a key facet of all social media going forward, then the Nuance deal probably has the biggest implications for Microsoft. Microsoft is paying $16 billion for an established, nearly 30-year-old company that provides speech recognition and transcription for doctor’s visits, customer service calls, and voicemails. The conventional wisdom here is that Microsoft is looking to grow the commercial side of its business, and will soon bundle Nuance’s speech recognition features into many of its offerings for companies and governments. A big win here would be Microsoft’s ability to grab a bigger toehold in the healthcare industry, especially in the era of COVID-19 and global pandemics.
As a secondary goal, Microsoft might be able to use the Nuance acquisition to bolster its own speech recognition efforts on the consumer side, most notably via its Cortana virtual voice assistant. By the end of 2020, it looked like Microsoft was starting to de-prioritize its Cortana business, but with the new Nuance deal, it could be a sign that Microsoft is ready to make a splashy new play. Obviously, Amazon and Google dominate the consumer market for home voice assistants, so maybe Microsoft could be ready to debut a new “Echo killer,” in an epic battle of Cortana vs. Alexa.
And, finally, don’t forget about the new “audio rooms” offering that Microsoft’s LinkedIn is in the process of developing. This new offering, which will be positioned as a rival to the popular audio social media app Clubhouse, could benefit from enhanced speech and voice recognition efforts. Imagine attending an audio event within LinkedIn, and then being able to get a full transcription of what everyone said during the event. Nuance could play a big role here.
Possible directions for Microsoft
The big picture here is that, in 2021, social media is no longer purely a consumer play. And that’s something Microsoft recognizes. Social media is now bundled into every facet of business life, and innovations that might have started in the consumer segment quickly make their way into the commercial segment. That’s exactly what Microsoft appears to be doing. Social media offerings like LinkedIn are positioned for business owners, small businesses and the commercial world, and consumer-facing technologies like Cortana and Skype are now getting bundled into business offerings. That might not be a sexy enough narrative for social media influencers, which could explain why nobody is talking about Microsoft quite yet. But rest assured, what Microsoft builds on top of all of its social media functionality will be a far greater story than anyone currently imagines.