Dennis Gorelik (![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
dennisgorelik) wrote2016-06-22 06:18 pm
dennisgorelik) wrote2016-06-22 06:18 pm
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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.
Responses:
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
Why would Microsoft buy the largest job board?
Microsoft is in a different business.
Responses:
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
Re: Executives motivation for merging
Net loss or no net loss, who cares (they don't count money with this kind of granularity, the stakes in that game are much higher), but if it is again a huge write-off, like with Nokia devices (which were bought before he became the CEO, so he was not responsible for that), there seems to be quite a bit protection built-in against this particular CEO being able to cash on things like that... (I don't think this protection was in place for his predecessor, who accumulated way too much personal power).
***
If a competitor acquires, they might not be open to a licensing or technology deal with Microsoft, and many of them have products competing directly with Cortana and such... So a competitor would gain an advantage, and an opportunity to move forward here would probably be lost forever...
Re: Executives motivation for merging
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.
Re: Executives motivation for merging
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...
Re: Executives motivation for merging
Spending $26B to protect yourself from something that may possibly happen does not looks like a reasonable purchase.
Re: Executives motivation for merging
http://www.pcworld.com/article/3083064/data-center-cloud/heres-microsoft-ceos-letter-to-employees-about-the-26-billion-linkedin-acquisition.html