Microsoft covets LinkedIn algorithms

Microsoft yesterday announced it would buy the business social network LinkedIn for a company acquisition record of $26.2 billion, a purchase triggered by Microsoft's appetite for algorithms, an analyst argued.

"There are two components to LinkedIn that Microsoft wanted," said Jenny Sussin, a Gartner research director, in an interview. "One is the data component, the other is the algorithm component."

An algorithm is a set of operations that tells a computer what calculations to run on what data, then how to process that data to generate a result. Algorithms are the "secret sauce" of many technology firms, the fiercely-guarded crown jewels on which a company's fortunes rest. Google's page-ranking algorithms, for example, are as secret as the recipe for Coca-Cola, and just as critical to Google's ability to generate relevant search results as the sugar water formula is to Coke's bottom line.

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