Eric Newcomer & Katie Benner on Microsoft acquiring LinkedIn: Did they overpay?

TL;DR

Microsoft's secretive acquisition of LinkedIn for $26 billion in a bidding war with Salesforce raises questions about the valuation and potential overpricing of the deal, while also highlighting the growing importance of big technology companies and the value of a social graph.

Transcript

first I'll just say I mean neither caterer I cover public companies sort of generally anymore right you're mostly covering private companies but this like the even I'm like this is the biggest scoop that didn't happen I mean the idea that they kept the purchase of LinkedIn quiet is agonized haha right i don't know it's just it's amazing nobody brok... Read More

Key Insights

• 😃 Microsoft's acquisition of LinkedIn was a significant and surprising move, considered the biggest scoop in the industry.
• 🫱 The competitive bidding war between Microsoft and Salesforce highlights the attraction and value of LinkedIn.
• ⁉️ The deal raises questions about valuation and the potential for overpricing, with the price tag being questioned as excessive.
• 😃 The acquisition emphasizes the growing importance of big technology companies and their ability to dominate and consume more value.
• 📼 LinkedIn's social graph and potential product improvements make it a valuable asset for Microsoft.
• ❓ The integration of LinkedIn with Microsoft's existing products has the potential for substantial growth and innovation.
• 😒 The limitations of Slack for enterprise use highlight the need for improved functionality, potentially fulfilled by Microsoft's integration of LinkedIn.

Questions & Answers

Q: How did LinkedIn manage to keep its acquisition by Microsoft a secret from the public?

According to the content, LinkedIn initially lined up Salesforce as a potential suitor before approaching Microsoft with the possibility of being acquired by someone else, ultimately leading to a 26 billion dollar deal. The secrecy was maintained to maximize the acquisition price.

Q: Do you think Microsoft overpaid for LinkedIn?

The content suggests that the 26 billion dollar price tag might be considered overpriced in the future. While the author acknowledges not being an expert in public company valuations, they raise the possibility that the deal could be seen as excessive in hindsight.

Q: What makes LinkedIn valuable and how could Microsoft improve it?

LinkedIn's value lies in its social graph and its potential for improvement as a product. Microsoft could integrate it with its existing products, creating a powerful social network for enterprises that combines messaging, email, and identity. The execution and integration will be crucial for its success.

Q: How does this acquisition impact other companies like Twitter and Slack?

The content suggests that LinkedIn's value and potential for improvement make it a more significant threat to Slack than Twitter. The author highlights the limitations of Slack for enterprise use, emphasizing the need for improved functionality that LinkedIn could potentially provide.

Summary & Key Takeaways

• Microsoft's acquisition of LinkedIn, which was kept quiet until the announcement, is considered the biggest scoop in the tech industry.

• The deal revealed the presence of a bidding war between Microsoft and Salesforce, with LinkedIn cleverly leveraging the competition to secure a larger price.

• The acquisition raises concerns about the potential overvaluation of public companies and highlights the potential for big tech companies to dominate and consume more value.