Microsoft’s $26bn LinkedIn Investment seems to be Paying Off
Microsoft, being the giant global corporation they are, has
a lot of money to throw around. Nonetheless throwing $26bn into the acquisition
of professional networking platform LinkedIn was seen as a bit of gamble by
many, as LinkedIn is far from the most profitable social media platform out
there when compared to the likes of Facebook; however it is perhaps the most
focused of the major players, and therein lay its value.
This value was recently demonstrated in the SSU 2018 Social Media Use Survey, in which LinkedIn ranked at number two -
second only to Facebook among social media platforms - in regards to usage, spending
& ROI. Microsoft were certainly confident of good prospects when they went
ahead with the deal back in 2017, and soon began releasing a slew of integrations
such as incorporating LinkedIn data into Office 365 programs including Outlook
and Word.
Now it seems their confidence has been validated as the company recently
released their financial results for Q3 2018, ended March 31st, in which LinkedIn was a
stand-out performer.
The results show that “LinkedIn revenue increased 37% (up
33% in constant currency) with continued acceleration in engagement highlighted
by LinkedIn sessions growth of over 30%”. This brings revenue figures up to a whopping
$1.3bn for LinkedIn alone. As for Microsoft’s larger Productivity and Business
Processes segment, of which LinkedIn is just one part, this accounted for a
staggering $9bn of the company’s $26.8bn in total revenue for the quarter.
While LinkedIn is still operating at a loss, this is largely
due to long-term costs associated with the $26.2bn acquisition that will decline
over time, bringing LinkedIn steadily back into the green. LinkedIn stands as Microsoft’s
single most expensive buy in their history, so they will certainly be hoping
this proves to be true.
In a call with investors on Thursday, Microsoft CEO Satya
Nadella addresses LinkedIn’s performance, stating, “From the start we recognised
the opportunity for LinkedIn and Microsoft to combine forces and create
economic opportunity for every member of the global workforce and enable
professionals to be more productive and successful. A little over one year in
we feel great about the value we are delivering for members, customers and
shareholders. Our integration model has helped LinkedIn accelerate growth while
retaining its member-first ethos.”
Sam
is an aspiring novelist with a passion for fantasy and crime thrillers.
Currently working as Editor of Social Songbird, he hopes to one day drop that
'aspiring' prefix. Follow him @Songbird_Sam
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Microsoft’s $26bn LinkedIn Investment seems to be Paying Off
Reviewed by Unknown
on
Friday, April 27, 2018
Rating:
Reviewed by Unknown
on
Friday, April 27, 2018
Rating:
Unknown
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