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Microsoft to Acquire LinkedIn For $26.2 billion

     
1:05 pm on Jun 13, 2016 (gmt 0)

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https://news.microsoft.com/2016/06/13/microsoft-to-acquire-linkedin/ [news.microsoft.com]

Microsoft to acquire LinkedIn

Microsoft Corp. (Nasdaq: MSFT) and LinkedIn Corporation (NYSE: LNKD) on Monday announced they have entered into a definitive agreement under which Microsoft will acquire LinkedIn for $196 per share in an all-cash transaction valued at $26.2 billion, inclusive of LinkedInís net cash. LinkedIn will retain its distinct brand, culture and independence. Jeff Weiner will remain CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft. Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner both fully support this transaction. The transaction is expected to close this calendar year.
2:45 pm on June 13, 2016 (gmt 0)

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Wow, that was a surprise, well, to me.

How will the industry now view LinkedIn now that it's owned by Microsoft?

Here's a link to the Linkedin blog
[blog.linkedin.com...]
3:31 pm on June 13, 2016 (gmt 0)

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This seems like a huge amount of money to me, but it does work out at about $60 per user, which does not sound so bad. It makes Google's acquisition of Youtube at $1.65 to look even more like a steal. Time will tell on Microsoft's LinkedIn deal :)
3:52 pm on June 13, 2016 (gmt 0)

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Oh, and yes, it does seem like a great deal of money, but, it's based $196 per share stock valuation. Microsoft wants the business market, and it's clear it'll give it a way in to introduce all the other services from Microsoft. Also, it's a social network which some may argue, is the only one for business people.
4:42 pm on June 13, 2016 (gmt 0)

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It sounds like a reasonable fit. Microsoft and business social networking makes more sense than, say, Microsoft and search.
4:58 pm on June 13, 2016 (gmt 0)

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Yeah, that does sound like a good fit but it also seems like an awful lot of money... Still, this is like the old days when Yahoo was scooping up search engines and PPC companies!
6:53 pm on June 13, 2016 (gmt 0)

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I wonder how much the security breach devalued LinkedIn and whether that affected the decision to sell.
7:02 pm on June 13, 2016 (gmt 0)

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Yeah, that does sound like a good fit but it also seems like an awful lot of money.

If I had $26.2 billion to invest, I'd forget LinkedIn and buy a neighborhood or two in Seattle instead. :-)
7:39 pm on June 13, 2016 (gmt 0)

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I think it's Another wrong step by MS, like they brought Nokia and that seems dead. :(
7:52 pm on June 13, 2016 (gmt 0)

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The amount of money is insane. LinkedIn is not worth 1/4 of the amount.

Probably a defensive acquisition. MS will try and push it's Office 365 for business there. "Office integrated newsfeeds", which is what some are pushing, are worthless. Access to quality labor that can be hired by Microsoft is another angle.

>> Microsoft is likely to incorporate LinkedIn profile data, which includes up-to-date information about peopleís career histories and education, into its own corporate software,

Time to delete LinkedIn profile before it's been sold and is in every marketing and data mining database.
8:16 pm on June 13, 2016 (gmt 0)

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Aha, figured out. It's a way for MS to repatriate cash they did not pay taxes on.

It's the money the likes of MS, Apple and Google are hiding in offshore accounts. MS did an "all cash" , but it is actually "all debt" deal, i.e. their bank will float this much debt which MS will later on pay off - probably doesn't matter to bankers if it is via an on-shore or off-shore account.
12:04 am on June 15, 2016 (gmt 0)

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but it does work out at about $60 per user, which does not sound so bad.


Have many people have been brainwashed as to realworld business or is this simply an American thing?

No one I know in my realworld business uses this crap, period ... it's pointless!

Then again, I know nothing, and I haven't known that for very long!
1:43 am on June 15, 2016 (gmt 0)

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No one I know in my realworld business uses [LinkedIn]
I agree. IMO many signed up at the beginning as the Social Media frenzy got going, and like most Twitter accounts, are absent users. Others think of it as a free (unless upgraded to Pro) resume service for headhunters. Still others make an effort to use LinkedIn as a marketing promotion tool, although often to a deaf ear. Microsoft somehow sees a value to the millions of members, absent or not.
2:56 am on June 15, 2016 (gmt 0)

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Well, what an interesting coincidence. It's only about a week since I threw in the towel and closed my LinkedIn membership on the rock-solid grounds that it wasn't doing me a speck of good, just generating a bunch of unwanted email.
3:37 am on June 15, 2016 (gmt 0)

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@lucy24 - have you checked to see if your name has actually been removed?

A year after I "removed" my account, a LinkedIn page with my name in the page title and my name at the top of the page (no other content about me) still existed and placed high in SERPs.

It took additional efforts to actually get it deleted and removed from their database.
5:26 am on June 15, 2016 (gmt 0)

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have you checked to see if your name has actually been removed?

No, I'm going to wait a couple of weeks and then see if my father or son (who are both members) need to tell them I died :)
4:40 pm on June 15, 2016 (gmt 0)

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I think Linked in is useful. It is a good way to keeping some sort of weak connection with work contacts. It does get used for recruitment.

The problem is that it is deteriorating - I see more irrelevant stuff (people posting political opinions and and personal news) in my feed, most groups are full of spam, and the news feed is getting too busy. Founders who know the business selling out at the top? Remember Myspace?
6:45 pm on June 16, 2016 (gmt 0)

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Now that they own both Skype and Linkedin hopefully they will cross-integrate because the current messaging system on Linkedin is abysmal. Besides, Skype is lacking a vision in business usage. I can see both services helping each other expand.

[edited by: not2easy at 7:12 pm (utc) on Jun 16, 2016]
[edit reason] general cleanup [/edit]

1:11 am on June 17, 2016 (gmt 0)

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LinkedIn certainly does have use outside the resume feature. I've used Groups to build up active local and industry focused communities. The company profiles sections can be good places to disseminate company information as well. Most of the postings I put up on LinkedIn get a lot more interaction than the same posts on a Facebook page. YMMV.

Microsoft isn't just getting a bunch of resumes with this acquisition. There's an entire community of fairly active professionals in there. This may not be obvious to you depending on how you use the site, but a lot of business people prefer this to the distraction that is Facebook.
10:58 pm on June 17, 2016 (gmt 0)

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According to this article in NYT(http://www.nytimes.com/2016/06/17/business/microsoft-linkedin-deal-ignites-twitter-speculation.html), LinkedIn active user count is only 100mil, that that would make it $260/user.
1:26 pm on June 20, 2016 (gmt 0)

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>> @blend27 LinkedIn active user count is only 100mil, that that would make it $260/user.

That probably includes me when I search for a specific person in SE and LinkedIn profiles with same or similar names come up on page 1 in bundles. And a whole lot of people like me. Doesn't make me an "active user".

It doesn't matter how much, it is a defensive acquisition (so that other cash-rich companies don't grab them) and it clearly is a way to repatriate tax-free cash, which just sits there for MS in some offshore and does nothing.

As some people mentioned above, lack of vision for these acquisitions may turn out to be just like Nokia (buy and destroy I think was the goal for reasons I won't go into here).

On a serious note,
LinkedIn + leading CRM + cloud-based document management + Microsoft Dynamics ERP (if Saas based again like Dynamics AX) + Skype for business users for Voip = some serious cash generator.

I don't hold my breath though for MS to be an innovator this time around , after some 25 rounds they already weren't one.
3:41 pm on June 20, 2016 (gmt 0)

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Doesn't make me an "active user".

If you're arguing that the "active user" count is actually lower than they say, then that makes an even higher price per user.

What service does LinkedIn provide to its owners that yields a return of $260-or-more per user? Will the average LinkedIn member spend more than $260 (lifetime) on products that they learned about through an ad on LinkedIn? How much does a paid account cost, and what proportion of users have one? (There doesn't seem to be any way to find out, at least not without signing up for a free account. How can you do business if you don't tell potential customers how much the product costs?)

Seriously, I'm trying to figure out how they make their money.
4:13 pm on June 20, 2016 (gmt 0)

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That's WAY overpriced IMO and even if it was a cash deal, it still impacts MS stock.
All these big deals, I'm waiting for the bubble to burst, it can't hold out much longer.

Alas poor 401K, I knew him well...

Having thought it over, LinkedIN makes perfect sense for MS because business are their target market and now they own a target rich platform full of potential customers to approach and existing customers to retain. Assuming they don't just screw it up like they have done many other things, this could be a major coup for Microsoft.
4:54 pm on June 20, 2016 (gmt 0)

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Linked IN recruiter accounts start at $100/month, job seeker are $30/month.

Their net revenue in 2015 was just under $3bn, which was 35% up on the previous year, so MS are paying a pretty high multiple on any ratio.
12:04 pm on June 21, 2016 (gmt 0)

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>> specific person in SE and LinkedIn profiles with same or similar names come up on page 1

hehe..,

I was once asked by a Sr. Exec at the interview several years back: what made me switch to programming after having a such a long and exiting career in beeswax industry. When I asked: How do you mean? she showed me a print out from "Gnoodle" with some poor soul`s name and endeavors on it.
 

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