Sateesh’s Weblog


Microsoft buy LinkedIn for $26B
June 15, 2016, 7:00 am
Filed under: Acqusition and mergers, Uncategorized | Tags: ,

I have been using LinkedIn from last 10 years. It started as a simple professional social network where you connect to other professionals in the world. Now it has more than 106 million active professional users. It acts as a resume for a employee where the employers can easily access everything (e.g. experience, skill-set, recommendations etc) through this network.
Now let us see what makes Microsoft buy LinkedIn for $26b dollars-
1. Revenue for Linkedin: Linkedin made $1.5b in revenue in 2013, $2.2b in 2014 and $2.9b in 2015. They currently have 3 revenue streams:
– Premium subscriptions, accounting for about 20% of their revenue
– Marketing solutions (i.e. advertising), accounting for about 25% of their revenue
– Talent solutions (i.e. recruiting tools for HR), accounting for the remaining 55% of their revenue.Linkedin
2. Membership: As of 2015, LinkedIn has more than 400 million members in over 200 countries and territories. It is significantly ahead of its competitors Viadeo (50 million) and XING (10 million).The membership grows by approximately two new members every second.
3. M&A: LinkedIn has acquired 16 companies till now. Major acquisitions include- eLearning platform (Lynda.com), content sharing platform (slideshare), and recruiting platform (connectifier).
4. IP Portfolio:
a. LinkedIn has 1735 unique granted patents and published applications filed mainly in US, EP, DE and CN using Dolcera PCS tool.

Dolcera PCS tool
b. 52% of the LinkedIn portfolio was acquired from other companies (IBM, AT&T, CISCO, DIGG, YAHOO etc). 801 patents are acquired from IBM in 2015.

Linkedinport
c. LinkedIn portfolio mainly includes patents related to social network content management, database management and data processing.

Linkedintechdist
$3b revenue, 1700+ IP portfolio, 400 million members would have made Microsoft buy LinkedIn.

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