[joshhart]

I left LinkedIn 1.5 years ago. I was there 12 years. I saw the revenue & profitability growth that occurred post acquisition. I am very very confident LinkedIn would be worth north of $100B on public markets today and Microsoft made the acquisition for $26B. You might argue that in the subsequent 6 years post acquisition that wasn't enough growth and they should have bought back shares instead but it was completely a debt financed acquisition and very high ROI for Microsoft.

[manquer]

Adjusting for inflation 26B from 2016 is worth 32B now. Going by just market returns 26B in S&P 500 in 2016, would be worth 70B today.

Also 26B is just initial investment, MS surely invested more money in the division in last 8 or so years, Linkedin was not exactly highly profitable entity in 2016, while it was not burning a lot of money, growth experienced in last few years would have needed additional investments in the business.

I don't have specific opinion on whether MS overpaid are not, just want to point out even 100B valuation today does not necessarily mean its high RoI for MS yet.

[joshhart]

LinkedIn was already very FCF positive. They tightly managed margins to get to net income positive (account for dilution and so on) but it took maybe 2 years after the acquisition.

[manquer]

Of course, they were and are healthy company, i was just trying to say they while very healthy it was not so profitable that just by using the free cash flow MS could have grown the business to today's size, it likely required external cash infusion and therefore $26 Billion is likely not the only money MS has spent on Linkedin.

As far as M&As go, it is very successful outcome, vast majority of them fail spectacularly, RoI is not perhaps the right metric to judge a strategic acquisition.

[miguelazo]

Financially, perhaps the numbers made sense. It was (and still is) a very basic social networking site with poor UX. Microsoft paid for a user base and a rudimentary surveillance system. It would have probably been better for them to just start from scratch. I don’t know a single person who likes LinkedIn. Most see presence on it as an obligation for certain industries. Most of the commenters on there are far worse than what you see on Facebook. It’s usually just one long stream of retired or underemployed old men complaining about “wokeness” and environmentalists ruining the world.