4 ms·

So, if i understand this correctly, microsoft paid too much for linkedin because they didn't want anyone else to buy it, but now they have to recoup the purchas

by Joeri 10y ago

So, if i understand this correctly, microsoft paid too much for linkedin because they didn't want anyone else to buy it, but now they have to recoup the purchase cost and they'll do that by making cuts at linkedin? Wat?

CyberDildonics 10y ago
Sounds like a page out of Yahoo's playbook.
- dave_sullivan 10y ago
  Ah, remember when dominos came out and was like, "We know we suck, but we're better now, I swear!" And for a minute, dominos got better. But now? Well now it's basically back to the same old shenanigans. Maybe it was just my hopeful imagination that convinced me they got better at all? Maybe this is how it goes with Microsoft (just like yahoo). Thinking about it, can anyone cite an example within the last 10 years when a non-founder CEO came in and successfully "turned things around" at a company? I can't.
  - xordon 10y ago
    This wasn't in the last 10 years, but Louis Gerstner turned around IBM in the 90s and wrote a good book about it: Who Says Elephants Can't Dance: https://www.amazon.ca/Who-Says-Elephants-Cant-Dance/dp/B00DJFX9MY https://www.amazon.ca/Who-Says-Elephants-Cant-Dance/dp/B00DJ...
    - kartD 10y ago
      +1, the book is excellent. It's substantive and illustrates something akin to a pivot for a large, at the time ailing company
    - ufo 10y ago
      Those reviews from IBM employees seem to disagree hahaha
  - joshdickson 10y ago
    It's a rare situation in the first place with so many founder-led companies these days. I would dare put David Sacks' name in the ring for what he's doing at Zenefits. Yes, his grade is certainly I for Incomplete at this point, and you can absolutely quibble with not just some of the things that he's done but how he's done them (the narrative that he knew nothing about the insurance fraud after having been there for a year as COO certainly makes me roll my eyes), but you have to admit there is very clearly an adult in the room at that company where there had obviously not been one (or at least one that was taken seriously) in many years. If you want to talk more large cap, you have to admire the job that Meg Whitman has done at HP, particularly now the HPE side. She came into what was really a terrible situation after they finally got rid of Leo Apotheker, who was, frankly, a pathetic leader for them. The company was saddled with unbelievably poor acquisitions, in particular the Autonomy purchase, poorly performing business divisions, and what can only be described as an aging and lethargic workforce. Despite it being really thankless work I would image, the new HPE, especially after the deal to merge most of their low-margin offshore consulting work with CSC, you have to admit is an intriguing company with a positive future ahead of it. She too receives an Incomplete, but what she's done has been impressive to date.
  - eddz 10y ago
    Kaz Hirai is doing pretty well at Sony, all things considered.
  - dewiz 10y ago
    T-mobile US comes to mind as an example
  - dharmon 10y ago
    Maybe you're looking far too restrictively and only thinking of tech companies, because of course it happens. Last 10 years? Alan Mullally at Ford and Richard Anderson at Delta are two off the top of my head.
joshdickson 10y ago
Well, a key aspect of this, and part of why LinkedIn wanted to sell itself to Microsoft, was that Nadella/Microsoft will allow LinkedIn to operate independently within Microsoft under Jeff Weiner. Microsoft didn't pay "too much," it's just that for the price that they paid, they want to see LinkedIn reduce costs. You have to remember that LinkedIn, despite an earnings report that would make you think otherwise, loses money on a GAAP basis. So Microsoft was fine with paying more as long as they could reduce some of that burn moving forward. That is not an indication that the deal was too expensive in aggregate, it's just how Microsoft thinks about its cash position moving forward.
- ufo 10y ago
  When you say "make you think otherwise" do you mean that their report is in the red despite large revenue or that they are fudging the books to make the report appear not in the red? (I'm trying to understand what you meant by not being in profit according to generally accepted principles)
  - vadym909 10y ago
    Not the OP- it's not fudging. As a business you get to choose what kind of accounting standards you want to follow. When someone says GAAP basis, it means the closest to a good or universally accepted accounting method (or straightforward means of calculating a profit).
    - kgwgk 10y ago
      You don't really have a choice. A company has to provide GAAP financial statements. And can also include non-GAAP financial metrics that "give a more accurate view of the operations and financial situation of the company." But they cannot do anything they want, there are rules imposed by the SEC (for example, they have to explain how to reconcile the GAAP and non-GAAP results). For LinkedIn, from the press release for Q1 results: "GAAP net loss attributable to common stockholders was $46 million and non-GAAP net income was $99 million." https://investors.linkedin.com/events-and-news/corporate-press-releases/press-release-details/2016/LinkedIn-Announces-First-Quarter-2016-Results/default.aspx https://investors.linkedin.com/events-and-news/corporate-pre...
adrenalinelol 10y ago
Hopefully it won't be as bad for Linkedin employess as it was for Nokia employees.

by Joeri 10y ago

CyberDildonics 10y ago

Sounds like a page out of Yahoo's playbook.

dave_sullivan 10y ago
Ah, remember when dominos came out and was like, "We know we suck, but we're better now, I swear!" And for a minute, dominos got better. But now? Well now it's basically back to the same old shenanigans. Maybe it was just my hopeful imagination that convinced me they got better at all? Maybe this is how it goes with Microsoft (just like yahoo). Thinking about it, can anyone cite an example within the last 10 years when a non-founder CEO came in and successfully "turned things around" at a company? I can't.
- xordon 10y ago
  This wasn't in the last 10 years, but Louis Gerstner turned around IBM in the 90s and wrote a good book about it: Who Says Elephants Can't Dance: https://www.amazon.ca/Who-Says-Elephants-Cant-Dance/dp/B00DJFX9MY https://www.amazon.ca/Who-Says-Elephants-Cant-Dance/dp/B00DJ...
  - kartD 10y ago
    +1, the book is excellent. It's substantive and illustrates something akin to a pivot for a large, at the time ailing company
  - ufo 10y ago
    Those reviews from IBM employees seem to disagree hahaha
- joshdickson 10y ago
  It's a rare situation in the first place with so many founder-led companies these days. I would dare put David Sacks' name in the ring for what he's doing at Zenefits. Yes, his grade is certainly I for Incomplete at this point, and you can absolutely quibble with not just some of the things that he's done but how he's done them (the narrative that he knew nothing about the insurance fraud after having been there for a year as COO certainly makes me roll my eyes), but you have to admit there is very clearly an adult in the room at that company where there had obviously not been one (or at least one that was taken seriously) in many years. If you want to talk more large cap, you have to admire the job that Meg Whitman has done at HP, particularly now the HPE side. She came into what was really a terrible situation after they finally got rid of Leo Apotheker, who was, frankly, a pathetic leader for them. The company was saddled with unbelievably poor acquisitions, in particular the Autonomy purchase, poorly performing business divisions, and what can only be described as an aging and lethargic workforce. Despite it being really thankless work I would image, the new HPE, especially after the deal to merge most of their low-margin offshore consulting work with CSC, you have to admit is an intriguing company with a positive future ahead of it. She too receives an Incomplete, but what she's done has been impressive to date.
- eddz 10y ago
  Kaz Hirai is doing pretty well at Sony, all things considered.
- dewiz 10y ago
  T-mobile US comes to mind as an example
- dharmon 10y ago
  Maybe you're looking far too restrictively and only thinking of tech companies, because of course it happens. Last 10 years? Alan Mullally at Ford and Richard Anderson at Delta are two off the top of my head.

joshdickson 10y ago

Well, a key aspect of this, and part of why LinkedIn wanted to sell itself to Microsoft, was that Nadella/Microsoft will allow LinkedIn to operate independently within Microsoft under Jeff Weiner. Microsoft didn't pay "too much," it's just that for the price that they paid, they want to see LinkedIn reduce costs. You have to remember that LinkedIn, despite an earnings report that would make you think otherwise, loses money on a GAAP basis. So Microsoft was fine with paying more as long as they could reduce some of that burn moving forward. That is not an indication that the deal was too expensive in aggregate, it's just how Microsoft thinks about its cash position moving forward.

ufo 10y ago
When you say "make you think otherwise" do you mean that their report is in the red despite large revenue or that they are fudging the books to make the report appear not in the red? (I'm trying to understand what you meant by not being in profit according to generally accepted principles)
- vadym909 10y ago
  Not the OP- it's not fudging. As a business you get to choose what kind of accounting standards you want to follow. When someone says GAAP basis, it means the closest to a good or universally accepted accounting method (or straightforward means of calculating a profit).
  - kgwgk 10y ago
    You don't really have a choice. A company has to provide GAAP financial statements. And can also include non-GAAP financial metrics that "give a more accurate view of the operations and financial situation of the company." But they cannot do anything they want, there are rules imposed by the SEC (for example, they have to explain how to reconcile the GAAP and non-GAAP results). For LinkedIn, from the press release for Q1 results: "GAAP net loss attributable to common stockholders was $46 million and non-GAAP net income was $99 million." https://investors.linkedin.com/events-and-news/corporate-press-releases/press-release-details/2016/LinkedIn-Announces-First-Quarter-2016-Results/default.aspx https://investors.linkedin.com/events-and-news/corporate-pre...

adrenalinelol 10y ago

Hopefully it won't be as bad for Linkedin employess as it was for Nokia employees.