Microsoft Acquisition Of Linkedin - Direct Acquisition Of Creamy Layer User's


Few days back, I wrote an article titled "LinkedIn as undisputed king of Professional world" Came true as Microsoft took a bold step to acquire LinkedIn with phenomenal 49% premium to their current share price. I was reading article floating here and there that Microsoft paid extra for the LinkedIn and is it possible for them to recoup their Investment and RoI. Many analyst started talking about Microsoft failed acquisition in the past and I can understand that its always easy to find out the negative approach in any acquisition.

My take on the acquisition are as follows:

It clearly indicate that US based companies are getting confident about the US economy and M&A is on the rise. The case is also supported with another tech acquisition of Blue Coat by Symantec.

When Facebook paid huge premium to Whatsapp then every appreciated because that it was having userbase at the same level as LinkedIn is having without any monetization plan. My query to all that, Why Facebook paid $19 Plus billion for Whatsapp. We don't have an answer but they played with the user usages pattern and accordingly populate the advertisement on user facebook to make more money through advertisement. We all observed huge growth in Facebook advertisement business and infact without advertisement revenue Facebook is nothing.

Google attempted to suppress most of the organization through their Android ecosystem and made it mandatory to have 30 different type of Google services and making Billions of $ in revenue as well as imposed their browser too. They are also using BI and AI to populate advertisement platform and we all know the size of their advertisement business.

The most interesting move of Microsoft is their tactical business move to cloud and mobility based focused on dynamic service. We must agree that their Skype acquisition started showing positive result and millions of users are getting attracted towards the robust service. Recently, I observed that they started monetizing Skype through advertisement business and very soon it will be major contributor to their overall revenue with very high EBITA.

The acquisition of LinkedIn with 440 Million plus userbase, around $4Bn Revenue with positive operating cash flow will enable Microsoft to make the organization profitable quickly through synergy.

The competitor of  Microsoft in the B2C segment should be ready to face the new unmatched product with Skype attached LinkedIn Service and It may Challenge YouTube in the field of professional world.

LinkedIn additional assets SlideShare can be additional assets for Microsoft to integrate with their Window operating system or convert it as another product MS office Suite.

Regarding the offer price, based on the result, LinkedIn balance sheet is having $3.2 billion of cash and marketable securities and acquisition is inclusive of cash means the actual payout is around $23 Billion. 

In my point of view, Microsoft will come out very fast with multiple Product line which will have Skype plus LinkedIn and one should not be surprised that it goes mobile in big way

Share this

Visionary Leader with 22 years of multi-functional experience - combine astute tactical, strategic, business, technology and industry skills in ICT domain at domestic and international level (Wired/Wireless/ networks /platforms/ connected device) .... More

Related Posts

Next Post »