Market Overview

Did Microsoft Get A Good Deal On LinkedIn's User Base? Here Are 7 Other Buyouts To Compare

Did Microsoft Get A Good Deal On LinkedIn's User Base? Here Are 7 Other Buyouts To Compare
Related GOOGL
A Handy Guide For What The Careful CEO Should, And Shouldn't, Talk About
What's Trending In Emerging Tech: 4K TVs, Smart Speakers Smash Hits; Wearables Struggle
—nd-Level Thinking Is Required for Outperformance (GuruFocus)
Related YHOO
A Deep Dive On The May IMX's Most Bought And Sold Stocks
IBM's Rethink On Remote Working — A Taste Of Things To Come?

A number of Microsoft Corporation (NASDAQ: MSFT) shareholders and analysts have been critical of the lofty $26 billion price tag that Microsoft paid for LinkedIn Corp (NYSE: LNKD) this week. While the market typically analyzes these types of deals in terms of income, revenue and cash flow, one of the biggest assets that Microsoft acquired in the deal is LinkedIn’s massive 433 million user base.

Number Crunching

When you crunch the numbers, Microsoft paid roughly $60.50 per LinkedIn user. How does that compare to other recent Internet buyouts?

Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOGL) paid $555.56 per Aardvark user, $240 per Jaiku user and $232.56 per Feedburner in its buyouts.

Yahoo! Inc. (NASDAQ: YHOO) paid $111.11 per Flickr user and a whopping $830.23 per GeoCities user.

Related Link: What Are The 5 Biggest Internet Buyouts Of All Time?

Compared to Google and Yahoo, Microsoft looks like it got a pretty good deal for LinkedIn.

However, Facebook Inc (NASDAQ: FB) is the king of thrifty user acquisition. Facebook paid only $42.00 per WhatsApp user and $28.57 per Instagram user.

Microsoft would certainly argue that LinkedIn users are much more valuable than Facebook or Twitter Inc (NYSE: TWTR) users.

CNBC reports that the average monthly LinkedIn user brings in roughly $8 in revenue, whereas the average Facebook user brings in $3–4 and the average Twitter user brings in less than $2.

Disclosure: The author holds no position in the stocks mentioned.

Posted-In: Aardvark CNBCCNBC M&A Tech Media Trading Ideas General Best of Benzinga


Related Articles (FB + GOOGL)

View Comments and Join the Discussion!