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Comment by hammerbrostime | Hacker News Reader

I'm surprised by the amount of negativity about the deal here on HN. It seems like an excellent match. I could see LinkedIn as an asset for Microsoft anywhere in the realms of work collaboration and HR. No other social network besides LinkedIn comes close to complimenting MicroSoft's wheelhouse of enterprise utility.

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It think the negativity is mostly due to the price tag. If I was a shareholder I would be furious over Microsoft paying $26billion for a money losing company. Even if Microsoft see some potential the rest of us aren't, and we have to assume that they are, they still need to find a way to turn a profit on the deal.

Given that they bought Nokia, only to shut it down, more or less, it would be reasonable for the shareholders to get a plan, detailing how LinkedIn will boost Microsofts business, with more that the $26 billion.

I think first thing to happen is lot of linked in employees getting fired. Since linked in employs a lot of people.

Guess where they'll be updating their resumes?

I wonder how much of the value was attributed to vanity metrics like the number of times people check the site? An inflated number since LinkedIn started using short term exploitation tactics like sending Notification Badges for your contacts' Birthdays and Work Anniversaries. Personally I also feel fleeced out of an outrageous monthly subscription that was sneaked through an undeclared AppStore transaction (I got >50% of the money back but not all). At this point I'm planning on deleting my account.

Can you talk more about this sneaked-in subscription? That's really concerning.

Did you consider suing? It's the only way to reach today's modern corporation.

Or you know, you could post it here and I bet you can find someone who works for the company.

Why? Dark patterns are intentional, you know. That's theft, as if they stole your wallet.

You don't accidentally bill people for a subscription service - and if you did you'd reverse it the instant you discovered it, not try to hide.

Save your righteous mercy for people who steal from you.

Yeah, even assuming Microsoft cuts losses and makes the company profitable again through some product integrations, it's still a huge price tag.

LinkedIn has stalled growth and brought in $2.9 billion in rev last year, which means that all things constant it will take nine years to cover the $26 B price tag.

Microsoft must really have some big plans for it to justify the costs.

That's not actually that bad, if that revenue were profit. Plugging it into a discounted cash flow calculator, this investment breaks even at a discount rate of 11%, which is much better than Microsoft could get elsewhere. At a discount rate of 3%, they'd only need to generate about $750M in profit to break even.

Problem is that revenue isn't profit, and LinkedIn is currently losing money, which makes their financial value negative. So Microsoft must be assuming one of three things:

1) LinkedIn will continue to grow, enough to raise revenues by a billion or so with minimal marginal expenditures.

2) They can cut costs enough to get to ~25% margins without losing market share.

3) There's strategic value when combined with Microsoft's existing business.

Any one of these seems like a reasonable (though far from guaranteed) bet.

Eh, I gave them the benefit of the doubt and figured they were valuating based on price/sales ratio, since earnings have been negative lately and that's probably the only way to come close to the 26B number.

With all things constant it will take a lot more than 9 years. The 2.9 billion in revenue doesn't account for the costs of running their business. Microsoft would need to make 26 billion in profit to cover the price tag.

Even more than that when considering the opportunity cost of not putting $26B into a stable investment vehicle.

> I'm surprised by the amount of negativity about the deal here on HN

price tag + whether it really makes sense for MS. Everybody remembers the Nokia fiasco.

Plus nobody likes Microsoft or linked in. Microsoft makes stuff you only use because you're paid to, and LinkedIn is something you use because of its ubiquity and despite the phone calls you're going to receive at work by desperate recruiters.

Unpopular opinion, but I like MS products - Just not the pricing! I did start in an MSSQL/.Net Devhouse though which may have tinted my rose glasses.

I hate Microsoft Project (never ever use the resource leveler) ... Visio was better when it was a core part of office - now I have to wonder whether the recipient of a diagram will be able to view it. Other than those two examples, I find that I can get work done in the Microsoft ecosystem.

This is like MS-Yammer at the scale of Google-Moto.

I agree, plus Slideshare can be a massive boost to Powerpoint.

Actually there hasn't been enough talk about the companies LinkedIn acquired.

Connectifier - recruiting intelligence

Lynda - online learning

FlipTop - predictive marketing

RunHop - personalised content

Refresh.io - relationship content surfacing

These could be huge additions to Azure, Office 365, Bing, Cortana etc.

Yup and Rapportive too.

Don't know if Lynda is a particularly great platform for training but imho MS would be well advised to spend the pittance it would cost to develop high quality free training for all of its applications. Productive users of your tools is important, or should be.

You mean something like Microsoft Virtual Academy[1] or Channel9 [2]? Both are free, excellent learning resources on par with Lynda or Pluralsight.

[1] http://microsoftvirtualacademy.com/ [2] https://channel9.msdn.com/

As someone who has to suffer through lynda. it's a pretty good example of a terrible platform

As far as I know, Microsoft owns Pluralsight. They also recently bought Digital Tutors. Perhaps another big merge will happen between Pluralsight and Lynda.

Microsoft does not own Pluralsight (employee)

> Refresh.io - relationship content surfacing

First time I heard that. Wanted to check it out. Redirects to LinkedIn now. Acquisitions killing off the acquired products is a trend I do not enjoy.

Could of been LinkedIn who did it, they might of wanted to integrate the service into LinkedIn possibly?

I would assume so. It's still sad that these ideas keep getting killed off.

Wayback Machine shows the 301s start appearing in late 2015.

I had no idea LinkedIn owned these sites / services. Especially Lynda... Microsoft could do quite a bit with Lynda they could train programmers through that, maybe even make it more interactive? There's of course other things they could do to those other sites. I really hope they don't just pull the plug on some of them though.

Have you ever been on the ground floor of a synergistic acquisition? In theory it should be easy to integrate data sources and reap the benefits. In practice what happens are year long efforts and organizational re-structurings every 3-6 months depending on what the cadence is with the end result being people being shuffled around and no benefits being reaped.

The restructuring is a huge part of it. Like Game of Thrones: Corporate Edition. Everyone is fighting to keep their job and use the opportunity to climb the ladder, and ensure their pet projects remain competitive. There are MASSIVE political interests from all levels and they can often eclipse the focus on actual integration and joining forces.

This is absolutely the case. Having been through my share of re-orgs due to M&As, another side-effect is that often some of the best talent leaves when things don't go quite the way they wanted.

Stuffs like these are going to be great boost for MS and its cloud initiative. Zenefit-esque product is next on the horizon.

And Lynda to developer and productivity tools.

Indeed. And even on the "buy a social network rather than build one", this is a great choice. Whether they like it or not, pretty much everyone already has LinkedIn.

Exactly! Linked In is the rolodex of the Internet on steroids. Microsoft just have to align it with the needs of their customers and they win.

$26bn is a lot of shareholder money.

And MS have a terrible track record for acquisitions.

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