LinkedIn is an American business and employment-oriented online assistance that functions via websites and mobile apps. It was launched on May 5, 2003, mainly used for learned networking, including firms posting jobs and job seekers posting their resumes.
Microsoft announced intentions to pay more than $26 billion for LinkedIn, and we now know even more about why the career-focused social networking site was so valuable.
Why Would Microsoft Do That?
“Together, we can accelerate the growth of LinkedIn as well as Microsoft Office 365 and dynamic as we seek to empower every person or organization on the planet,” says CEO Satya Nadella in a press release.
While they do not doubt that Microsoft will try to use the 433 million people who have their profiles on LinkedIn to sell them software and services, there is no reason to believe that Microsoft has the strategic skills needed to revive LinkedIn’s growth.
To be sure they do not require a review of the financial projection on which Microsoft justified thing any of 50% premium from LinkedIn. Still, since LinkedIn is losing money, there is little reason to believe that Microsoft will boost its class cash flow.
The Big Revelation
Microsoft revealed that LinkedIn author Reid Hoffman had joined its board. It’s impossible to exaggerate the significance of this move for Microsoft. CEO Satya Nadella is three years into a turnaround that few people believed possible. When he was promoted to CEO in February 2014, Microsoft was in the wrong place.
After a period, the company had posted its first-ever quarterly loss. Steve Ballmer proclaimed he would step down, but before leaving, he pushed through the acquisition of Nokia. It was a costly mistake. Microsoft settled up financing $7.9 billion for the Finish cell phone maker, according to an April 2015 SEC filing; the company wrote off approximately the whole sum in the final semester of 2015.
Microsoft’s chief problem was this the company’s nucleus business was degenerating, a dynamic that was set in m VHotion more than a decade ago when nearly every industry owned and ran Windows-powered PCs and servers. Microsoft had parked itself in the middle of Innovator Dilemma-land. The company had little incentive to invest in future businesses that might interrupt the business it was previously in.
It also had a miserable credit, particularly in Silicon Valley, where fellowship and collaboration are hallmarks of tech’s progression and every major player enjoys frenemy status with its adversaries. Microsoft wasn’t a company that partnered with outsiders. It scorned the open-source society and looked down its nose at tech opportunists. In a public conversation with Marc Andreessen in October 2014, investor Peter Thiel called Microsoft a bet “against technological innovation.”