Linkedin bought a predictive marketing company. What does it mean?

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I think many people like Linkedin as a platform of professionals and they are interested in what is going on in the company.  Last week, I found that “Today we are pleased to announce that we’ve acquired Fliptop, a leading provider of predictive sales and marketing software.1″  (David Thacker said on the blog on 27 August, 2015 ).  Linekdin bought a leading predictive marketing company.  What does it mean? Let me consider a little.

 

1. What does “Fliptop” do?

It is a marketing software company. On the website, it says  “DRIVE REVENUE FASTER WITH PREDICTIVE MARKETING”, “Increase lead conversion rates and velocity.” and “Identify the companies most likely to buy”.  It was established in 2009 so it is a relatively young company. The company uses technologies called “Machine learning” to identify potential customers with high probability of purchase of products and services.   According to the website of the company, it has an expertise of standard machine learning algorithms, such as logistic regression and decision trees. These methods are used for classifications or predictions.  For example,  the company can identify who is likely to buy the products based on data, including the purchase history of each customer in the past. It hires computer science experts to develop the models for predictions.

 

2. What will Linkedin do with Fliptop?

As you know, Linkedin has a huge customer base so it has a massive amount of data generated by users of Lnkedin everyday.  This data have been accumulated every second. Therefore Lnikedin should have an ability and enhance it to make the most out of the data.  Linkedin should analyze the data and make better business decisions to compete other IT companies in the markets. In order to do that, there are two options, 1. Technologies developed In-house,  2. Purchase of resources outside the company.  Lnkedin took an option of “2” this time. Doug Camplejohn, CEO of Fliptop, said “We will continue to support our customers with existing contracts for some period of time, but have decided not to take on any new ones. We will also be reaching out to our customers shortly to discuss winding down their existing relationship with Fliptop.”.  Therefore Fliptop will not be independent as a service provider and will be integrated into the functions of Linkedin. It seems that knowledge and expertise of Fliptop are seamlessly integrated into Linkedin in future.  I am not so sure what current users of Fliptop should do as long as I know now.

 

3.  Data is “King”

This kind of purchases has been seen in IT industry recently. Google bought “DNN research” in 2013 and “DeepMind” in 2014. Microsoft also bought “Revolution Analytics” in 2015.  These small or medium size companies have expertise in machine learning and data analysis.  When they try to expand their businesses, they need massive data to be analyzed. However, they are not owners of a massive amount of data. Owners of a massive amount of data are usually big IT companies, such as Google and Facebook.  It is sometimes difficult for relatively small companies to obtain a massive amount of data, including  customer data.  On the other hand, big IT companies, including Linkedin, are usually owners of huge customer data. In addition to that, big IT companies now  enhance resources and expertise to analyze data as well. Once they have both of them, new services can be created and offered in a shorter period. The more people use these services, the more accurate and effective they can be.  Therefore, it sounds logical when big IT companies acquire small companies with expertise in data analysis and machine learning. Big IT companies definitely need their expertise in data analysis and machine learning.

 

 

From the standpoint of consumers, it is good because they can enjoy many services offered by big IT companies with lower costs. But from the standpoint of companies, competitions are getting tougher as this occurs not only in IT industries but many other industries. Now Linkedin seems to be ready for this competition, which comes in the future.

Machine learning is sometimes considered as engines and data are considered as fuel.  When they are combined in one place, new knowledge and insights may be found and new products and services may be created.  It accelerates changes of the landscape of the industries. Mobile, cloud, big data, IOT and artificial intelligence will contribute to this change a lot. It must be exciting to see what happens next in the future.

 

 

 

Source

1. Accelerating Our Sales Solutions Efforts Through Fliptop Acquisition, David Thacker, August 27, 2015 

http://sales.linkedin.com/blog/accelerating-our-sales-solutions-efforts-through-fliptop-acquisition/

2.A New Chapter,  Doug Camplejohn, August 27, 2015

http://blog.fliptop.com/blog/2015/08/27/a-new-chapter/

 

 

Note: Toshifumi Kuga’s opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or solicitation to buy, sell or hold any security or to adopt any investment strategy.  The information in this article is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding any country, region market or investment.

Data from third-party sources may have been used in the preparation of this material and I, Author of the article has not independently verified, validated such data. I accept no liability whatsoever for any loss arising from the use of this information and relies upon the comments, opinions and analyses in the material is at the sole discretion of the user. 

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