By Jay Greene 

Microsoft Corp.'s $26.2 billion deal to buy LinkedIn Corp. is the latest step in a tight race among tech giants to give their wares a semblance of human smarts. The software giant and its arch competitors aim to mine vast quantities of data -- searches, emails, text messages, social networks, browsing behavior, and so on -- for insights that would help them serve and even anticipate customer needs.

As Microsoft announced the largest acquisition in its history, Apple Inc. revealed plans to bring advanced computer vision to its photo software so devices can identify the faces of family and friends in pictures and categorize images more easily. Last month, Alphabet Inc. unveiled Google assistant, a software helper designed to predict what users want by analyzing their behavior and learning their preferences so that it might, say, offer to make dinner reservations when a restaurant was mentioned in a text message.

Such capabilities are the province of the technology known as machine learning, in which computers examine huge amounts of existing information -- so-called training data -- in search of patterns that it can use to understand new information as it arrives. With LinkedIn, Microsoft is gaining a trove of details about the work lives, colleagues and employers of the business social network's 105.5 million monthly active users: a unique set of training data that the software giant hopes will give it an advantage in serving business customers.

"That's really what this next wave of technology innovation is about," Microsoft Chief Executive Satya Nadella said during a conference call Monday, referring to machine learning. "But in order to be able to do that, you need data, and LinkedIn represents that."

Microsoft, which has adopted spreading "intelligence" throughout its offerings as an explicit goal, aims to enhance, rather than replace, human performance. Where Google's autonomous cars stop, turn, and change routes without human intervention, Microsoft has focused on using machine intelligence to provide insights that can inform human decisions.

Forrester Research Inc. analyst Jeffrey Hammond refers to the technology as "augmented intelligence" to distinguish it from artificial intelligence.

"It adds a whole lot of rich contextual information," Mr. Hammond said.

The fruits of this approach are already available in the company's products. Last month, it revamped its SharePoint collaboration and networking program to analyze lists of meeting attendees, frequent email correspondents, collaborators on documents, and the like. The software uses the results proactively to deliver information, such as internal reports or news articles, that might be useful to a given user.

If Microsoft can deliver on that promise, LinkedIn data will feed Microsoft products such as SharePoint, the Office productivity suite, or Dynamics sales tools, to streamline projects and pinpoint prospects. Microsoft, as part of its presentation to analysts about the deal, described a scenario in which Cortana, its digital assistant, notified a user that a coming meeting included someone who attended the same college and shared a LinkedIn connection. Then, Cortana offered to link to the attendee's profile and share the meeting presentation.

Other tech giants have their own versions of Microsoft's Cortana strategy. Apple's voice-activated assistant Siri is now smart enough to work with non-Apple apps to perform tasks like calling for car service or sending messages through text networks like WeChat. Facebook is fine-tuning a concierge called M whose digital brain passes along to human attendants any requests that it isn't sure it can fulfill. IBM's Watson has been studying medical data in hope of helping doctors make faster, more accurate diagnoses.

Amazon.com Inc.'s Echo, a smart household gadget in the form of a small cylinder, functions as ears and voice for Alexa, an artificial intelligence that answers spoken questions about topics like weather and traffic. Google intends to roll out Google Home, an Echo competitor that taps the search giant's vast data repository to understand what users want.

Like Microsoft, all the tech behemoths aim to distribute intelligence throughout their products.

"The next big step will be for the very concept of the 'device' to fade away. Over time, the computer itself -- whatever its form factor -- will be an intelligent assistant helping you through your day," Google Chief Executive Sundar Pichai wrote in an April letter to shareholders.

Artificial intelligence, though, has proved remarkably foolish at times. In March, Microsoft introduced Tay, a Twitter feed that mimicked the texting habits of an American woman aged 18 to 24. But online pranksters gamed Tay's learning mechanism, which led the bot to tweet anti-Semitic rants.

As tech giants train their machine learning engines on ever larger stores of data, the potential grows for users to feel unnerved. To derive value from LinkedIn, Microsoft will need to keep tabs on users' contacts, communications and activities. Its AI will be informed by updates to LinkedIn profiles, which may indicate that a user is considering a career move, and project management systems, which may contain designs of future products and other strategically sensitive information.

"How do they use that data to provide a truly convenient experience without crossing the border into creepy ones?" asked Forrester's Hammond.

At LinkedIn, users control how they share their data. Mr. Nadella said that customers would decide what to share. But Microsoft, like its peers at the center of the digital universe, is betting those customers will let it mine their information because they will get value from the insights it generates.

"When it comes to machine learning and analytics, it is a tremendous opportunity for us," Mr. Nadella said.

Deepa Seetharaman, Jack Nicas and Daisuke Wakabayashi contributed to this article.

Write to Jay Greene at Jay.Greene@wsj.com

 

(END) Dow Jones Newswires

June 14, 2016 18:20 ET (22:20 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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