Few days back, I wrote an article
titled "LinkedIn
as undisputed king of Professional world" Came true as Microsoft
took a bold step to acquire LinkedIn with phenomenal
49% premium to their current share price. I was reading article floating
here and there that Microsoft paid extra
for the LinkedIn and is it possible for them to recoup their Investment and RoI. Many analyst started talking about
Microsoft failed acquisition in the past
and I can understand that its always easy to find out the negative approach in
any acquisition.
My take on the acquisition are as follows:
It clearly indicate that US based companies are
getting confident about the US economy
and M&A is on the rise. The case
is also supported with another tech acquisition of Blue Coat by Symantec.
When Facebook paid huge premium to Whatsapp then every appreciated
because that it was having userbase at the same level as LinkedIn is having
without any monetization plan. My query to all that, Why Facebook paid $19 Plus billion for Whatsapp. We don't have an answer but they played with the user
usages pattern and accordingly populate the advertisement on user facebook to
make more money through advertisement. We all observed huge growth in Facebook
advertisement business and infact without advertisement revenue Facebook is
nothing.
Google attempted to suppress most
of the organization through their Android
ecosystem and made it mandatory to have 30 different type of Google services and making Billions of $ in
revenue as well as imposed their browser too. They are also using BI and AI to
populate advertisement platform and we all know the size of their advertisement
business.
The most interesting move of
Microsoft is their tactical business move to cloud and mobility based focused
on dynamic service. We must agree that their Skype acquisition started showing
positive result and millions of users are getting attracted towards the robust
service. Recently, I observed that they started monetizing Skype through
advertisement business and very soon it will be major contributor to their
overall revenue with very high EBITA.
The acquisition of LinkedIn with
440 Million plus userbase, around $4Bn Revenue with positive operating cash
flow will enable Microsoft to make the organization profitable quickly through
synergy.
The competitor of Microsoft in the B2C segment should be ready
to face the new unmatched product with Skype attached LinkedIn Service and It
may Challenge YouTube in the field of professional world.
LinkedIn additional assets
SlideShare can be additional assets for Microsoft to integrate with their
Window operating system or convert it as another product MS office Suite.
Regarding the offer price, based on the result, LinkedIn balance sheet is having $3.2 billion of cash and marketable securities and acquisition is inclusive of cash means the actual payout is around $23 Billion.
In my point of view, Microsoft will come out very fast with multiple Product line which will have Skype plus LinkedIn and one should not be surprised that it goes mobile in big way
