4 ms·

Twitter is the cheapest of the big networks. LinkedIn is entrenched in its market, unlike most of the others (including Instagram, Snapchat, etc.) Twitter I thi

Twitter is the cheapest of the big networks. LinkedIn is entrenched in its market, unlike most of the others (including Instagram, Snapchat, etc.) Twitter I think would be a good buy somewhere, but Jack and his team seem inept and they probably want a massive premium. When I first heard the news it made no sense; but after pondering, I think I know what they are trying to do, and it does makes sense. Also, LinkedIn was relatively cheap compared to its counterparts, I've already seen some shareholders raising some ire because they were trading a LOT higher not long ago. Microsoft doesn't have a good track record with big acquisitions, but this is Satya's first and we have seen other deals turned down by him for being too rich. Salesforce being the prime example. They paid with all cash (which was yielding nothing,) so now they get the benefit of a company that has pretty good revenues, is really close to profit, and they get a massive tax write off. It also integrates well with their core businesses and like I said, it's fairly cheap. Let's not forget Satya has had some smart aquisitions lately. Minecraft & Xamarin. So, maybe it's worth having confidence in this one.

ChrisArchitect 10y ago
speaking of, how does LinkedIn make its money anyways?
- surfmike 10y ago
  Mostly subscription fees paid by recruiters for premium access.
- jonathankoren 10y ago
  About half to two-thirds comes from job listings, the remaining is split evenly between subscriptions and ads.
GCA10 10y ago
The outer edges of Twitter's user base will frighten off most corporate acquirers. Too much ISIS; too much political screaming; and a user culture that doesn't want Facebook style barriers to R-rated or X-rated content. Big companies hate to be caught in the middle of controversies. LinkedIn's content is safe to a fault. Buying Twitter and making it uncontroversial would drain two-thirds of the value right away. Maybe more.
- bad_user 10y ago
  Twitter users actually spend time on Twitter, read status updates from hundreds of followed accounts, have it installed on their phones, etc. And at least for me Twitter has been much more interesting than Facebook. Because even though most of my friends are on Facebook, most of the people I admire are on Twitter. LinkedIn on the other hand is, depending on your point of view, either a database of incomplete, mostly outdated and uninteresting resumes, or a circle jerk of HR folks and dubious "coaches". People stay on LinkedIn because they are afraid of missing out. But really, it's a genuine ghost town, a once promising service that was completely destroyed by their monetization needs and most of us have classified LinkedIn emails as spam long ago, after realizing you can't unsubscribe from it. And the only reason I haven't deleted my account yet is because once in a blue moon I get to take a look at forwarded profiles. You don't get anything interesting really, LinkedIn profiles are boring, superficial and generic, but hope never dies.
  - manigandham 10y ago
    > you can't unsubscribe from it You can unsubscribe from all it. https://www.linkedin.com/psettings/messages https://www.linkedin.com/psettings/messages
    - bad_user 10y ago
      No, you can't. First of all they are exposing like a dozen options, but without any way to tell them "unsubscribe from everything". This means that they can keep adding categories. For example I don't remember an option for receiving invitations for joining groups. If this option was available I would have disabled it and guess what, it's now enabled on my account. But far more aggravating is that I'm receiving emails straight to my Inbox from HR people even though I unsubscribed from such email. Do you know how I know that LinkedIn has sold my email address against my preferences? It's because I'm using an unique email address just for LinkedIn. You know, I can use a menu, I can find a link, have been doing it for quite some time ;-)
Silhouette 10y ago
is really close to profit This is the thing I find hard to understand about these big corporate acquisitions. What multiple of "really close to profit" makes a bigger number than $26B? If it's a start-up with obvious potential but relatively early in its life, or an established business that is currently reinvesting revenues on a large scale to drive growth, I can understand not being concerned about the profits. But this is LinkedIn. It's not like it's a new company. It's already dominant in its market, and I don't see obvious potential for spectacular growth within the same area. If it's not already making big profits, what makes it worth $26B to Microsoft?
- math0ne 10y ago
  26B dollars itself isn't making any money, so all it has to do is make some money and its a good deal.
  - Silhouette 10y ago
    But in this case, "make some money" seems to mean "make more than $26B after overheads", since they don't have the original $26B any more.
- jkaljundi 10y ago
  It has been growing 35% year on year recently, at $3b revenue. No reason why this could not keep accelerating thanks to effects from MS.
  - Silhouette 10y ago
    No reason why this could not keep accelerating thanks to effects from MS. That seems a little optimistic to me. With LinkedIn in such a dominant position, there is only so far for them to grow in user numbers. That means they need to increase revenue-per-user as well to maintain anything like that kind of growth, but again there is only so far you can push with things like advertising rates before your customers can get better returns on their budget from other channels.
- fma 10y ago

ChrisArchitect 10y ago

speaking of, how does LinkedIn make its money anyways?

surfmike 10y ago
Mostly subscription fees paid by recruiters for premium access.
jonathankoren 10y ago
About half to two-thirds comes from job listings, the remaining is split evenly between subscriptions and ads.

GCA10 10y ago

The outer edges of Twitter's user base will frighten off most corporate acquirers. Too much ISIS; too much political screaming; and a user culture that doesn't want Facebook style barriers to R-rated or X-rated content. Big companies hate to be caught in the middle of controversies. LinkedIn's content is safe to a fault. Buying Twitter and making it uncontroversial would drain two-thirds of the value right away. Maybe more.

bad_user 10y ago
Twitter users actually spend time on Twitter, read status updates from hundreds of followed accounts, have it installed on their phones, etc. And at least for me Twitter has been much more interesting than Facebook. Because even though most of my friends are on Facebook, most of the people I admire are on Twitter. LinkedIn on the other hand is, depending on your point of view, either a database of incomplete, mostly outdated and uninteresting resumes, or a circle jerk of HR folks and dubious "coaches". People stay on LinkedIn because they are afraid of missing out. But really, it's a genuine ghost town, a once promising service that was completely destroyed by their monetization needs and most of us have classified LinkedIn emails as spam long ago, after realizing you can't unsubscribe from it. And the only reason I haven't deleted my account yet is because once in a blue moon I get to take a look at forwarded profiles. You don't get anything interesting really, LinkedIn profiles are boring, superficial and generic, but hope never dies.
- manigandham 10y ago
  > you can't unsubscribe from it You can unsubscribe from all it. https://www.linkedin.com/psettings/messages https://www.linkedin.com/psettings/messages
  - bad_user 10y ago
    No, you can't. First of all they are exposing like a dozen options, but without any way to tell them "unsubscribe from everything". This means that they can keep adding categories. For example I don't remember an option for receiving invitations for joining groups. If this option was available I would have disabled it and guess what, it's now enabled on my account. But far more aggravating is that I'm receiving emails straight to my Inbox from HR people even though I unsubscribed from such email. Do you know how I know that LinkedIn has sold my email address against my preferences? It's because I'm using an unique email address just for LinkedIn. You know, I can use a menu, I can find a link, have been doing it for quite some time ;-)

Silhouette 10y ago

is really close to profit This is the thing I find hard to understand about these big corporate acquisitions. What multiple of "really close to profit" makes a bigger number than $26B? If it's a start-up with obvious potential but relatively early in its life, or an established business that is currently reinvesting revenues on a large scale to drive growth, I can understand not being concerned about the profits. But this is LinkedIn. It's not like it's a new company. It's already dominant in its market, and I don't see obvious potential for spectacular growth within the same area. If it's not already making big profits, what makes it worth $26B to Microsoft?

math0ne 10y ago
26B dollars itself isn't making any money, so all it has to do is make some money and its a good deal.
- Silhouette 10y ago
  But in this case, "make some money" seems to mean "make more than $26B after overheads", since they don't have the original $26B any more.
jkaljundi 10y ago
It has been growing 35% year on year recently, at $3b revenue. No reason why this could not keep accelerating thanks to effects from MS.
- Silhouette 10y ago
  No reason why this could not keep accelerating thanks to effects from MS. That seems a little optimistic to me. With LinkedIn in such a dominant position, there is only so far for them to grow in user numbers. That means they need to increase revenue-per-user as well to maintain anything like that kind of growth, but again there is only so far you can push with things like advertising rates before your customers can get better returns on their budget from other channels.
fma 10y ago