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Microsoft to acquire LinkedIn for $26B

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Re: Microsoft to acquire LinkedIn for $26B

#781

Post by mathattack »

exelius wrote: post #299

Great move. IMO this is Microsoft making a play for HR managed services -- look for them to sign a big deal with ADP / BenefitsExpress / buy someone like Zenefits to complement this purchase. The power and value of LinkedIn is as a recruiting platform; and recruiting is a big-money problem that's only getting worse. If they can turn LinkedIn into a benefits management platform, that would be a huge win for Microsoft…

I think you're very right. The acquisition would only make sense for a b2b company. This gives Microsoft the social network that's most relevant to their customer base. If they integrate it with the cloud Office suite, even better. LinkedIn will benefit from the Microsoft sales force.

I think Salesforce or IBM would be the other potential buyers, but perhaps LinkedIn would be too big for them to swallow.

Re: Microsoft to acquire LinkedIn for $26B

#782

Post by tacticus »

mistermann wrote: post #260
threeseed wrote: post #195

Earlier quoted context omitted.

Actually there hasn't been enough talk about the companies LinkedIn acquired. Connectifier - recruiting intelligence Lynda - online learning FlipTop - predictive marketing RunHop - personalised content Refresh.io - relationship content surfacing These could be huge additions to Azure, Office 365, Bing, Cortana etc.

Don't know if Lynda is a particularly great platform for training but imho MS would be well advised to spend the pittance it would cost to develop high quality free training for all of its applications. Productive users of your tools is important, or should be.

As someone who has to suffer through lynda. it's a pretty good example of a terrible platform

Re: Microsoft to acquire LinkedIn for $26B

#783

Post by autokad »

rhizome wrote: post #778
hackaflocka wrote: post #648

Earlier quoted context omitted.

Great story. It's a sure sign that a strong bureaucracy has set in when one sees this. It's common in government organizations, but becoming more common in non-government (especially large) organizations.

It's common on Craigslist amongst the spamming services [sic] like Resumator, Sourcery, etc. Furthermore, experience has taught me that any time I see a job ad on LinkedIn that says, "Apply on Company Website," I assume there will be a tedious form to fill out (not to mention account creation).

tech companies have done a really good job at stream lining the process. Most of them you just click on the job and click apply with an upload resume button and optional upload cover letter button.

Re: Microsoft to acquire LinkedIn for $26B

#784

Post by bduerst »

nostrademons wrote: post #672
bduerst wrote: post #490

Earlier quoted context omitted.

Yeah, even assuming Microsoft cuts losses and makes the company profitable again through some product integrations, it's still a huge price tag. LinkedIn has stalled growth and brought in $2.9 billion in rev last year, which means that all things constant it will take nine years to cover the $26 B price tag. Microsoft must really have some big plans for it to justify the costs.

That's not actually that bad, if that revenue were profit . Plugging it into a discounted cash flow calculator, this investment breaks even at a discount rate of 11%, which is much better than Microsoft could get elsewhere. At a discount rate of 3%, they'd only need to generate about $750M in profit to break even. Problem is that revenue isn't profit, and LinkedIn is currently losing money, which makes their financia…

Eh, I gave them the benefit of the doubt and figured they were valuating based on price/sales ratio, since earnings have been negative lately and that's probably the only way to come close to the 26B number.

Re: Microsoft to acquire LinkedIn for $26B

#785

Post by Spooky23 »

Dwolb wrote: post #744
exelius wrote: post #299

Great move. IMO this is Microsoft making a play for HR managed services -- look for them to sign a big deal with ADP / BenefitsExpress / buy someone like Zenefits to complement this purchase. The power and value of LinkedIn is as a recruiting platform; and recruiting is a big-money problem that's only getting worse. If they can turn LinkedIn into a benefits management platform, that would be a huge win for Microsoft…

My own view differs from the "benefits management platform" thinking. I don't think they want to do insurance or retirement benefits. I think they want you to use their productivity tools more frequently. To me this is all about white collar productivity tools and integrations. LNKD is the keystone that manages a users journey as users ebb and flow through using (and not using) MSFT tools and products (Word, Excel, S…

They want you to do anything that drives SQL Enterprise sales. That drives all of Microsoft's stock value and profitability.

Oracle and Salesforce own database hungry spaces like HR, CRM, etc relative to Microsoft.

As a side bonus, they get to mine an incredibly rich collection of intelligence data linking millions of professionals to influencers. I know with my employer, access to the firehouse of LinkedIn data would help them identify and cultivate relationships with future influencers whom their sales teams know zippo about.

Re: Microsoft to acquire LinkedIn for $26B

#786

Post by argonaut »

Sylos wrote: post #315
argonaut wrote: post #180

Earlier quoted context omitted.

Most people have not heard of 9gag. Most adults probably don't really know what a meme is yet either (they've probably seen a few, just don't really get it yet).

His point was that even on 9GAG, which does not have a tech-focused community, this is a central talking point, so it's not just the tech-crowd which is pissed off about this. Sure, 9GAGgers are still at least capable of operating a computer or smartphone, but if you move even further down in tech-capabilities, it also becomes quite unlikely that those people will buy something from Microsoft to begin with.

9GAG does have a tech savvy community, that's my point.

Re: Microsoft to acquire LinkedIn for $26B

#787

Post by Retra »

shimon wrote: post #649
jsprogrammer wrote: post #631

Earlier quoted context omitted.

I get messages through LinkedIn asking for my resume. Also, why would it be great for a company to exclusively maintain your resume?

A few reasons: - There's one widely accessible database where resumes can be found. Since many people want to be found by prospective employers, this gives them an obvious place to put it. - The resume format can be standardized, so you can focus on meaningful differences instead of the cognitive challenges of extracting meaning from a heavily stylized document. - There can be a commonly available API for exposing th…

There are just as many benefits to a standardized infrastructure as there are downfalls caused by adopting the wrong standard, by forcing people onto it, or by using it for too long.

Re: Microsoft to acquire LinkedIn for $26B

#788

Post by wtbob »

pbarnes_1 wrote: post #763
shostack wrote: post #740

Earlier quoted context omitted.

Is it normal to have the clause about the shareholders turning the merger down? Seems like one helluva way to ram it down shareholders throats without much option to say no.

That's why it's done.

As a shareholder I would find that kind of behaviour to have been the exact opposite of the kind of duty my mangers owe me. I'm surprised it's legal.

Re: Microsoft to acquire LinkedIn for $26B

#789

Post by alex_c »

sireat wrote: post #715
alex_c wrote: post #651

Earlier quoted context omitted.

It's easy (and fun!) to criticize in hindsight, but there was a strong strategic case to be made for the Nokia acquisition back then. Obviously it didn't work out, but given Microsoft's cash reserves at the time it wasn't even a particularly large gamble.

I really did not see many people making a case for Microsoft's Nokia acquisition (here and in the business press). It seemed mostly negative.

Well, both HN and the business press are often negative - and on the surface Microsoft was buying a failing business, so it's a reasonable reaction.

A case in favor of the acquisition might go something like this:

1. Microsoft was far, far behind in mobile, with little hope to catch up through internal efforts alone. "Winning" mobile had the promise to unlock a lot of new revenue across Microsoft's other business units, "losing" mobile threatened to restrict Microsoft to the stagnating desktop market.

2. The industry was already consolidating (Google buying Motorola), there was a looming patent war, Nokia was sitting on a ton of patents, and was one of the few (if not the only) good target left for acquisition.

3. CEO of Nokia was ex-Microsoft, so Microsoft likely had a good idea what they were getting. (Conversely, this could mean Nokia CEO knew exactly how to apply lipstick to a pig to get it sold).

In short, limited time window to act, potential for dramatic growth for Microsoft if it works out, relatively small downside if it doesn't (IIRC the cost was something like 10% of Microsoft's cash reserves at the time). I'd take that bet to be honest.

All of this is speculation of course (I have no inside knowledge), and it was clearly not worth it in the end, but I can understand why a decision like this might have been made.

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