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22 June 2016 @ 06:18 pm
Microsoft buys LinkedIn for $26.2B  
That was unexpected and I even thought it is a joke. But it is not a joke.

Why would Microsoft buy the largest job board?
Microsoft is in a different business.

1) What a terrible time to be burning that much cash, just before the next recession, and on a resume site. I was starting to see some good things coming from Microsoft but this makes me shake my head and question leadership big time.

2) I suspect major LinkedIn investors shopped around the company and financial-engineered a sophisticated kickback
Dennis Gorelikdennisgorelik on June 23rd, 2016 08:35 pm (UTC)
Re: Executives motivation for merging
1) You are describing "total disaster" scenario.
Nadella must be totally incompetent in order to kill LinkedIn and loose all $26B.
Much more likely scenario is partial loss. When LinkedIn stagnates or slowly declines.
If Nadella is not penalized for stagnation and slow decline, but gets acquisition bonus - then it is clearly a perverse compensation incentive.

2) Microsoft already has solid investor and business connection with Facebook.
If they need huge social graph for their Cortana algorithm - they have it.
No need to buy LinkedIn for that.
anhinga_anhingaanhinga_anhinga on June 23rd, 2016 08:53 pm (UTC)
Re: Executives motivation for merging
To lose ALL of 26B would be rich ;-) I mostly think an intermediate-scale disaster, like losing a third of that, that is all of the premium over market cap in that deal... That would be quite enough, and much more realistic...

But unless it is a publicly visible multibillion-dollar write-off, nobody would care...

Stagnation would not be welcome for Microsoft as a whole, but specifically at the LinkedIn level would not be too much of a problem for Nadella...


Facebook is different; MS wants business social graph, that is linkedin, they don't care about causal social... Their business model favors that quite specifically...

Facebook can also become a competitor at any moment, even if the relations are currently good...
Dennis Gorelikdennisgorelik on June 23rd, 2016 10:32 pm (UTC)
Re: Executives motivation for merging
> Facebook can also become a competitor at any moment

Spending $26B to protect yourself from something that may possibly happen does not looks like a reasonable purchase.
anhinga_anhingaanhinga_anhinga on June 24th, 2016 02:13 am (UTC)
Re: Executives motivation for merging
Мне всё это тоже не кажется разумным... И в этом е-майле, который Наделла послал сотрудникам Микрософта по этому поводу, я как-то не усматриваю никакого разумного содержания: