News this morning is that Microsoft is going to buy Linkedin for $26 Billion USD. Now I’m not saying we are in a new .com tech bubble but…
Linkedin has 433 million users. That would give a cost per user of $60usd. Now my first thought is that if Microsoft spent that money on advertising a $60 cpa is about $58 more than it would cost to get users to join a free social network.
The second thought is how the hell are they ever going to make their money back at that. It’s a social network that noone likes or spends any time on unless:
- They are looking for leads to start spamming
- They need a job
- They want to steal other peoples employees / professional contacts
Am I missing something or is this the most ridiculous deal since they took over Nokia in 2013 for $7.6 billion (yeah seriously, Nokia, you probably wont even remember who they are unless you are my age). Perhaps they just love playing snake and wasting their excessive cash vault at a time when software is moving away from the desktop.
For the final quarter of 2015, LinkedIn had a net profit of $126m. This was down 50% on the year before. Linkedin’s share price was pretty bubilicious anyway and Microsoft just paid a 50% premium on it.
Crazy stuff happens in big business.