Microsoft to aquire linkedin for $26.2B

• FatHobbit

  

  http://techcrunch.com/2016/06/13/microsoft-to-buy-linkedin-for-26b-in-cash-makes-big-move-into-enterprise-social-media/
  
  I'm not entirely sure what they plan to do here. Maybe try to expand to compete with Facebook? That's an awful lot of money for a social network that isn't profitable.
• sleeper

  

  FatHobbit;1798989 wrote:http://techcrunch.com/2016/06/13/microsoft-to-buy-linkedin-for-26b-in-cash-makes-big-move-into-enterprise-social-media/
  
  I'm not entirely sure what they plan to do here. Maybe try to expand to compete with Facebook? That's an awful lot of money for a social network that isn't profitable.

  First thoughts: Terrible buy. I'm not really sure the strategy or how this meshes well with Microsoft's core business.
• gut

  Yeah, big waste of money.
  
  Problem with these types of businesses is that there's absolutely no barriers to competition or competitive advantages. Remember MySpace?
• sleeper

  

  gut;1799003 wrote:Yeah, big waste of money.
  
  Problem with these types of businesses is that there's absolutely no barriers to competition or competitive advantages. Remember MySpace?

  MySpace failed because it was largely unusable compared to what Facebook has become. I don't think a competitor will emerge to LinkedIn.
  
  The issue is largely two parts:
  
  1) Why Microsoft? How does this help them add value to their core business?
  2) Will LinkedIn ever provide a ROI to make it worth it for MSFT? I don't think its a profitable company and I don't see it growing big enough to scale into a better EBITDA.
• jmog

  LinkedIn can be a good social media app/website for what it does.
  
  The problem with trying to make it "profitable" is that it is really only useful/used by white collar/office working people. You just cut your possible market by 60% (estimated 60% of US workers are blue collar, 40% white collar).
  
  The fact that there really isn't any ads is the best part of linkedIn but it also makes it nearly impossible to ever have an RoI. If MS goes all profit searching in LinkedIn and adds in advertisements many of its low use members will completely stop using it.
• vball10set

  pocket change
  
  /sleeper'd
• gut

  jmog;1799081 wrote: The fact that there really isn't any ads is the best part of linkedIn but it also makes it nearly impossible to ever have an RoI. If MS goes all profit searching in LinkedIn and adds in advertisements many of its low use members will completely stop using it.

  They charge for job postings, and possibly for companies to access (presumably a company has to be a premium user to make use of advanced search features). Also have regular subscription dues - made $2B last year with -$166M in net income (but they may actually be profitable now, the loss driven by large losses carried forward).
  
  But, yeah, MS will probably screw it up trying to monetize it. Although they may use it as a loss leader, knowing it's a good source for targeting business users, users who work with MS office products.
  
  Seems like a ridiculous price, but it's market cap is $25B - so that's what the traders think the company is worth. It is growing fast and expanding into China and other markets.
• gut

  doh....didn't realize this deal was announced months ago. MS offered a premium of about 50% where it was trading at the time, but still fully 20% lower than it's peak valuation.
  
  It's trading near their $26.2M offer now because it will converge on that price as the deal becomes certain to close.
• Laley23

  

  If it makes people have to use/buy their products (Yammer, OneNote, etc) it will be a good deal for them.
• OSH

  

  I thought I heard/read somewhere that Microsoft may add this (LinkedIn) to Office or some setup like that.