Microsoft just tossed away $26 billion buying linkedin ....

[Nine_Ender]

Hmm, gotta disagree with you here. First, just because one has 26bln lying around does not mean it has to be invested in inferior projects. Why am I saying inferior? Because MSFT should for once admit to itself that it does not understand social media. It's simply not their thing. They now have the incredible chance to be a dominant and powerful player in AI and that is what they should focus on. Each time they tried their hands on social media they got burned. Each try at mobile burned them too. There is a world of opportunities out there away from social media. Why investing in the one area MSFT knows nothing about. It's not like LinkedIn is the social media king and is gonna teach MSFT a lesson or two.

Worst investment ever for MSFT.

But why does it matter ? Shareholders can exit now if they hate the deal. What I'm saying is we can't as laymen fully comprehend what is going on. Wall Street analysts never saw AMZN's sudden profitability spike ( and corresponding bankruptcies in brick and mortar retail ) coming. I always though GOOG was a hype/bubble stock early on, what value could a freeware search engine really have ? Yet their earnings are massive. When I first saw LNKD, I wasn't impressed. But in the years since they grew their customer base and it's become a must have aspect of many professional's life while I ignored it. My wife used their services heavily recently and got hired as a result. They have some real value as a paid service.

$26 billion sounds absurd, yes. But advertising revenues at FB sound absurd to me too so that tells me I can't fully grasp the nuances of what's occurring. Twitter to me is totally useless, the barriers to entry seem minimal to me. But how easily can a LNKD in be replaced now ? Guess we'll find out.

MSFT shareholders should sell anyways, take profits on the nice run and avoid the short term risks of this acquisition and interest rate hikes.

 

[S2007S]

Hmm, gotta disagree with you here. First, just because one has 26bln lying around does not mean it has to be invested in inferior projects. Why am I saying inferior? Because MSFT should for once admit to itself that it does not understand social media. It's simply not their thing. They now have the incredible chance to be a dominant and powerful player in AI and that is what they should focus on. Each time they tried their hands on social media they got burned. Each try at mobile burned them too. There is a world of opportunities out there away from social media. Why investing in the one area MSFT knows nothing about. It's not like LinkedIn is the social media king and is gonna teach MSFT a lesson or two.

Worst investment ever for MSFT.

It is the worst investment they could have made....they don't understand social media and it seems they try and try and try to always catch up with the newest trends and always fail....you would think a company that size being around for over 30 years would have the R&D to one up everyone in the industry but nope....there is nothing that linkedin and msft have in common...they are saying its a great match but that's just all talk to make it look like spending $26 billion on a social networking site was well worth paying what they paid.....

 

[S2007S]

Out of the 400-500 million linkedin accounts how many are actually active???? Has to be less than a 1/2....

 

[conduit]

Well to start with shareholders could have gotten a way better return on their investment. That Msft had to pay up 50% shows how afraid management is to let another offer blow up in thin air. Had Msft offered a 20 or 30% premium as is customary then investors were better off. So it's not entirely fair to argue that investors should be indifferent.

I do agree that there is very little visibility for everyone involved in the numbers and any future estimates. I cannot stand ads for the life of it and most of the times do not even notice advertisement outside or online but I also know I am an exception in this regard. I never in my life bought something out of motivation by an ad. I still believe that the whole online ad world is one giant bubble and that online ads are completely ineffective and that companies overpaid in the hundreds of billions in aggregate for years for something they thought they have to be part of because everyone does it. Let's admit that linked in would be worth 50-100 million max without the ad business. Very hard to extract value from the few paying subscribers they have.

But why does it matter ? Shareholders can exit now if they hate the deal. What I'm saying is we can't as laymen fully comprehend what is going on. Wall Street analysts never saw AMZN's sudden profitability spike ( and corresponding bankruptcies in brick and mortar retail ) coming. I always though GOOG was a hype/bubble stock early on, what value could a freeware search engine really have ? Yet their earnings are massive. When I first saw LNKD, I wasn't impressed. But in the years since they grew their customer base and it's become a must have aspect of many professional's life while I ignored it. My wife used their services heavily recently and got hired as a result.

$26 billion sounds absurd, yes. But advertising revenues at FB sound absurd to me too so that tells me I can't fully grasp the nuances of what's occurring. Twitter to me is totally useless, the barriers to entry seem minimal to me. But how easily can a LNKD in be replaced now ? Guess we'll find out, I'm not saying they won't write this off in 5 years.

 

[conduit]

Are you kidding? Depending how you precisely define active I put the number of active accounts more like at 1 in 8-10 (like logging in at least once a week)

Out of the 400-500 million linkedin accounts how many are actually active???? Has to be less than a 1/2....

 

[S2007S]

Are you kidding? Depending how you precisely define active I put the number of active accounts more like at 1 in 8-10 (like logging in at least once a week)

So more like 40 -50 million active accounts?


That's why I never believe these numbers by most of these companies that claim they have all these active users when really only 10-20% might actually be using the site....

 

[conduit]

It's just a guess of mine of course but I go by own usage and I log in once a month knowing I use it a lot less frequently than others but at the same time linked in is not facebook

So more like 40 -50 million active accounts?


That's why I never believe these numbers by most of these companies that claim they have all these active users when really only 10-20% might actually be using the site....

 

[Nine_Ender]

Well to start with shareholders could have gotten a way better return on their investment. That Msft had to pay up 50% shows how afraid management is to let another offer blow up in thin air. Had Msft offered a 20 or 30% premium as is customary then investors were better off. So it's not entirely fair to argue that investors should be indifferent.

To keep this in perspective, it's $4 a share, so the downside risk of this transaction is pretty clear. After many years of treading water living off their legacy product lines what I had heard is they are doing quite well in newer areas like cloud computing. The premium may be 50% but it's zero premium on LNKD in price only a few months ago.

Yes, it's a huge gamble but maybe not so much for them. What I'm saying is all we hear about on hear is "experts" criticizing everything about companies and deals they know very little about. They are not all failures, as my examples of GOOG, FB, and more recently AMZN illustrate. I'm being realistic, I cannot fathom why FB is doing so well but perhaps the initial forecasts about the power of the Internet in the 1990s are coming true now, just not exactly as people thought, and 10+ years later then people thought. My observation is giants in the industry are doing well, and smaller players not so well.

 

[achilles28]

It's a bubble. Whatsapp 12 billion. LinkedIn 26 billion.

It's like the Tech wreck. Pet.com ipo raises 10 billion and they don't do anything

Every balance sheet looks great on paper when the s and p is at all time highs. Just wait until we get a bear market. These do nothing companies will be exposed for what they are

 

[S2007S]

It's a bubble. Whatsapp 12 billion. LinkedIn 26 billion.

It's like the Tech wreck. Pet.com ipo raises 10 billion and they don't do anything

Every balance sheet looks great on paper when the s and p is at all time highs. Just wait until we get a bear market. These do nothing companies will be exposed for what they are

WhatsApp that made probably zero profits was bought for a bubble price of $19,000,000,000

Hahahaha......$19 billion for a messaging app ....
Do you know how many brilliant minds you can hire for $19 billion bucks to create the next technological breakthrough and they go out and throw away $19 billion on some lame messaging app....