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Data Sheet—Tuesday, June 14, 2016

Yesterday Microsoft offered $26.2 billion for LinkedIn. Even though this massive deal was a surprise—zero leaks—pairing the dominant business social network with the dominant business software company is not a new idea. In fact, in 2012 Fortune’s Adam Lashinsky asked LinkedIn CEO Jeff Weiner if he was prepared to do such a deal, if Microsoft offered, because “it makes no sense to me that Outlook and LinkedIn aren’t the same thing.” Weiner’s response was to laugh and tout LinkedIn’s “lightweight integrations” with Microsoft Outlook. “We think there’s some exciting opportunities and potential there to go deeper, so keep an eye on that space,” Weiner added.

It took them four years to act on that potential. You can read some of Fortune’s analysis of the deal here and here.

Two things stick out about this union: First is that Microsoft had an opportunity to get a foothold in social media in 2012 when it paid $1.2 billion to acquire Yammer, the business messaging software startup. But the company blew it: Frequent outages, bad customer support, and little in the way of new features or upgrades drove people to Yammer’s many competitors, including today’s startup darling, Slack. In March, Microsoft reportedly tried to buy Slack for $8 billion. Now, even Facebook is coming after business messaging with Facebook at Work.

The second is that LinkedIn is nearly unusable for most people I know. At the Fortune Brainstorm Tech conference last year, a startup founder asked LinkedIn founder Reid Hoffman why LinkedIn has “one of the least responsive, most confusing interfaces on the public Internet.” Hoffman’s answer was telling: “We got a lot of work to do, we got to improve, but it’s, you know, it was like, OK, so look, we got a lot of work to do.”

That 433 million people use the service nonetheless is a testament to how essential it is. Can Microsoft improve LinkedIn’s design and user experience? Maybe! Microsoft’s iOS app for Outlook is the best email app I’ve used since Mailbox (RIP), but the desktop software remains abysmal. I hope deeper integration between LinkedIn and Outlook will make each of them better—anything with the potential to cut down on “I’d like to add you to my Network on LinkedIn” emails is well worth $26.2 billion.

Erin Griffith is a writer at Fortune. Follow her on Twitter or drop her an email.

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BITS AND BYTES

Here is Snapchat’s plan for winning mobile ads. It will now allow video advertising created by authorized outside agencies, not just Snapchat’s internal team, to display in content streams. According to a recent report, the app now has more than 150 million daily active users, which is a larger number than Twitter has. But it also has high revenue ambitions, a reported $300 million this year compared with $59 million in 2015. (Fortune)

Introducing two more Google business apps. The first service, Google Springboard, is a tool that can search for specific information and documents that are stored in other Google Apps, including Gmail, Calendar, Docs, Drives, and Contacts. It’s like the company’s now-defunct search appliance, but in software form. The second new service, Google Sites, is meant for intracompany communications. Both are available to early adopters, as Google cloud exec Diane Greene gets more serious about winning over bigger businesses. (Fortune)

VMware expands bet on software-defined data centers. The company is paying an undisclosed sum for Arkin Net, a management software startup co-founded by a former VMware executive. The promise of software-defined data centers is that companies can reconfigure equipment and reroute traffic on the fly without making a lot of manual changes to the hardware. VMware entered this business with its $1.26 billion acquisition of Nicira four years ago. (Fortune)

Microsoft shrinks Xbox, talks up virtual reality ambitions. The company’s latest game console carries a price of $300, which is about $50 less than the previous edition. It’s also much slimmer than the current generation. Microsoft plans to follow up this release with Project Scorpio, a system optimized for virtual reality content, before the end of the year. (New York Times)

Meanwhile, Sony picks October for virtual reality headset. The much anticipated PlayStation VR will be released Oct. 13, with a price tag of around $399. That’s less expensive than two rival technologies, Oculus Rift and HTC Vive, but the headset requires Sony’s latest game console to operate. (Fortune)

Twitter spikes on Microsoft-LinkedIn news. The social network’s stock closed almost 4% higher on Monday, at $14.55 per share, buoyed by acquisition speculation. Through last Friday, Twitter’s shares had lost 39% of their value this year, as investors worry over a string of executive departures and a slowdown in new user sign-ups. (Bloomberg)

Price of bitcoin hits two-year high. The digital currency traded above $700 on Monday, the most since February 2014. (The highest price ever was $1,147.) The activity is most likely due to an upcoming market adjustment meant to limit the creation of new coins. (Wall Street Journal)

 

THE DOWNLOAD

How LinkedIn could finally make Microsoft Dynamics a big deal. Once people got over the shock of Microsoft’s $26.2 billion plan to buy LinkedIn, there were some other surprises, reports Fortune senior writer Barb Darrow.

For one thing, Microsoft Dynamics, the company’s accounting and customer relationship management (CRM) software lineup, suddenly appears very strategic. With apologies to that team at Microsoft, Dynamics has been the red-headed stepchild among Microsoft’s favored children, Office and Windows. More recently, Microsoft’s Azure cloud has sucked all the air out of the room.

Dynamics CRM competes with Salesforce’s Sales Cloud, at least when it comes to small and midsized companies. Several Dynamics accounting products compete with NetSuite or SAP, also in smaller companies. But if you’re a Microsoft watcher, Dynamics, which resulted from acquisitions of Great Plains Software and Navision in the early 2000s, never rose above the noise generated by cash cows Office and Windows.

Another reason for a lack of emphasis might have been that Microsoft has courted SAP and Salesforce as important software partners. Dynamics had its own specialized conferences like Convergence, but otherwise it seemed an afterthought. Microsoft CEO Satya Nadella headed up Microsoft Business Solutions, the Dynamics group, for about three minutes years ago before moving up. But it sounds like Dynamics could benefit big from the LinkedIn buyout. (Fortune)

Can’t get enough Microsoft-LinkedIn coverage? Here’s more:

AN APPLE CONFERENCE CHEAT SHEET

Who is Apple’s music executive Bozoma Saint John? If you watched the livestream of Apple’s annual developer conference on Monday, you would have seen there was one Apple executive who outshined her colleagues while presenting: Bozoma Saint John.

One of the few female executives onstage, Saint John is Apple’s head of global consumer marketing for Apple Music. She shared news about Apple’s streaming music service, which has accumulated 15 million users, according to the company.

As Fortune senior writer Leena Rao reports, it’s no surprise that Apple appointed Saint John as the head of marketing around one of its highest profile services, Music, as she has built an impressive career around connecting musicians and artists with brands. She joined Apple through its Beats acquisition, but before that she was an influential marketer at Pepsi. (Fortune)

What’s news in San Francisco? A Monday recap:

IN CASE YOU MISSED IT

PayPal’s $890 million bet on immigrants by Leena Rao

Lawyer for Uber driver slashes fees by $10 million by Jeff John Roberts

GE’s new software cuts pollution from coal plants by Katie Fehrenbacher

ONE MORE THING

Rivalry between mobile coffee apps perks up. Dunkin’ Donuts is rolling out mobile ordering features nationwide to keep up with Starbucks. It has a lot of catching up to do: The Seattle-based coffee giant has almost 19 million mobile app users in the U.S. alone, compared with the 4.3 million people who use Dunkin’s rewards program. (Fortune)

This edition of Data Sheet was edited by Heather Clancy.