James Bachini

Microsoft to buy Linkedin

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.

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James Bachini

Disclaimer: Not a financial advisor, not financial advice. The content I create is to document my journey and for educational and entertainment purposes only. It is not under any circumstances investment advice. I am not an investment or trading professional and am learning myself while still making plenty of mistakes along the way. Any code published is experimental and not production ready to be used for financial transactions. Do your own research and do not play with funds you do not want to lose.