Microsoft dropped a bomb earlier this week by paying a reported $7.5 billion for GitHub, the world’s biggest collection of tech talent on the web. The move makes Microsoft the owner of the top two professional networks around, once you throw in LinkedIn, which went for $26.2 billion a few years ago.
As with most bombs that go off around an entire industry, there are winners and there are losers. Usually, it takes time to realize who wins and loses, but there are some immediate conclusions that can be drawn as far as I can tell.
Here are the winners.
- LinkedIn. The world’s most influential professional network gets a brother in arms and a one-two punch that can’t be matched at the moment. Add to the fact that most GitHub users aren’t on LinkedIn, or flat out hate LinkedIn, and there’s not a lot of overlap in talent that can be accessed via both sites.
- Dice. Yes, it dropped the ball. Yes, 10 years ago you could’ve predicted it’d be the one in this week’s headline. But many open-source developers aren’t smitten about Microsoft buying GitHub, so that’s an opportunity. If I’m Dice, I’m going to the top 50-100 GitHubbers and paying them to come to Dice and build a competitive product to GitHub where the anti-Microsoft programmers can play. Longshot? Yes. But an opening? Yes too.
- Stack Overflow. The same opportunity that now exists for Dice also exists for Stack Overflow. It has a great opportunity to solidify its position as Pepsi to GitHub’s Coke, and the value of its business should’ve gone up significantly after the GitHub acquisition. Invest now.
- Facebook. People are incredibly valuable to a platform, and Facebook has the most, by far. It’s a safe bet to say 90-plus percent of the people on LinkedIn and GitHub are also on one of Facebook’s properties. As Facebook gets more and more interested in employment, the move by Microsoft gives it 7.5 billion more reasons to get more serious about it.
And the losers.
- Recruit Holdings. It owns Indeed. It recently bought Glassdoor for $1.2 billion, which now looks weak in light of the kind of resources Microsoft can throw around. Buying Resume.com equally looks like a peashooter against a bazooka. The mountain Indeed has been climbing since Google for Jobs came to town just keeps getting higher and higher.
- Sourcing tech. The HiQ case against LinkedIn, and the ability for solutions like Hiring Solved, Open Web, SeekOut, and others to scrape data from sites like LinkedIn and GitHub looms even larger now. If the doors to both LinkedIn and GitHub close to these solutions, then warm up the bus.
- Monster. All job boards, really. But for the company that passed on buying LinkedIn in the ’00s, ejected on Tickle, and bailed on BeKnown before things really had a chance to come together, the GitHub pill seems particularly bitter. Fortunately, an all-new leadership team means almost no one at Monster remembers these events.
- Google. It lost to Facebook on the social networking game. It lost to LinkedIn, and thus Microsoft, on the professional networking race. And now it takes another hit by losing to arch-nemesis Microsoft on the GitHub deal. If Google is hoping to index professional profiles from around the web and make them available to Hire users, it may have to reevaluate that strategy.
I’ll add that the jury is still out on employers. On one hand, GitHub will have new resources to improve its service and attract more users. Job postings and messaging developers should be built in eventually, making it easier to connect with talent. LinkedIn might even become the hub for all that activity.
On the other hand, however, Microsoft has serious pricing power in light of owning both LinkedIn and GitHub. As a result, employers are most certainly going to pay more to have the privilege of using Microsoft. It could also take some of the decision making out of the hands of recruiting and put it in IT, further weakening HR’s influence in corporations.
Oh yeah, one more. For bloggers, podcasters, and other industry pundits, the deal is a clear win.
