Members can invite anyone (whether an existing member or not) to become a connection. LinkedIn allows members (both workers and employers) to create profiles and connect with each other in an online social network which may represent real-world professional relationships. As of March 2023, LinkedIn has more than 900 million registered members from over 200 countries and territories. Since December 2016, it has been a wholly owned subsidiary of Microsoft. From 2015 most of the company's revenue came from selling access to information about its members to recruiters and sales professionals. The platform is primarily used for professional networking and career development, and allows jobseekers to post their CVs and employers to post jobs. Professor Mike Wade is Director of the Center for Digital Business Transformation, an IMD and Cisco initiative.LinkedIn ( / l ɪ ŋ k t ˈ ɪ n/) is a business and employment-focused social media platform that works through websites and mobile apps. Microsoft could build on this core strength and adapt it to its other enterprise assets, such as Office 365. 60% of LinkedIn’s traffic originates from a mobile device. Imagine the potent combination of Microsoft Dynamics and LinkedIn Sales Navigator? This acquisition is a direct challenge to the CRM market leader, Salesforce.įifth, LinkedIn is strong on mobile, where Microsoft continues to be weak, despite multiple attempts to grow. This acquisition will give it some social media street credit.įourth, LinkedIn is well aligned with Microsoft’s Dynamics Cloud business. Its purchase of Yammer has not quite gone far enough. Microsoft has been talking about building its social presence for some time. It makes little sense for Microsoft to invest in a consumer social media site like Snapchat when its core focus is on the enterprise space. Third, it strengthens Microsoft’s position in the enterprise market segment. That’s a big weight on its balance sheet and the pressure to spend it or issue a special dividend, as it has done in the past, was mounting.
Second, Microsoft was sitting on more than $100 Billion in cash and short-term investments. Microsoft will hopefully be able to better leverage LinkedIn’s impressive 400 million members. These criticisms are justified. LinkedIn has only recently woken up to leverage its massive network and move beyond being just a job search site. The markets have been hammering LinkedIn for not maintaining growth numbers in users and revenues.
Even paying a 48% mark-up on the current stock price, Microsoft is still buying LinkedIn at less than its value on January 1 st, 2016. Here are the top reasons why the acquisition makes sense for Microsoft.įirst, LinkedIn is undervalued. 26.2 billion! That seems like a big ticket price, but Microsoft is getting a good deal.
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