A little confused as to why but apparently Microsoft has purchased LinkedIn. In case you did not know LinkedIn is is a business and employment-oriented social networking service that operates via the web. So again I asked…..why? Well I have been noticing Microsoft make moves toward being more social. Windows 10 Microsoft decided to be more like Apple and Google by offering syncing services as well as an app store to coincide with their Operating System. I assume this is just another step in that direction but let us look at a little history for Microsoft here shall we?
In 2014, Microsoft bought Nokia for $6.1 billion which proved to be a failure and was written off a year later.
Microsoft offers to buy Facebook for $15 billion but was declined. Kind of reminds me of a image I saw:
So in this deal for LinkedIn, Microsoft paid $26.2 billion which breaks down into: $196/share and a 50% premium on the share price at announcement time. Which is cool actually since LinkedIn is popular but it has not been as profitable as one might think. Last year LinkedIn reported a yearly loss of about $165 million. This leads me to think as to how LinkedIn makes any money at all and I find out that LinkedIn has a recruiting service for corporations looking to hire employees. I know LinkedIn has advertising too but that could have really amounted to much of their earnings. I am saying how many of us are are LinkedIn as often as we are on Facebook? So since this is the case how is Microsoft going to make any money in this deal? Readers…. Microsoft basically paid $60 for every LinkedIn user. Shoot I signed up for free so if Microsoft paid for my account where is my money at?
Now the industry is moving more into social networking, cloud, and mobile devices while the application and operating system business dies down which places Microsoft in a better place to service this need by purchasing LinkedIn. Either way LinkedIn just has not really come on top but Microsoft has money to waste I supposed. I hear Microsoft has roughly $91 billion to lose or win so they can afford it. Seeing what Microsoft has done with Windows 10 I am thinking they will look to integrate LinkedIn with their current offerings. So all of us 433 million users who use LinkedIn are going to eventually see LinkedIn powered by Microsoft or perhaps just be pushed into using Microsoft service offerings.