Did Microsoft Get A Good Deal On LinkedIn's User Base? Here Are 7 Other Buyouts To Compare
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.
When you crunch the numbers, Microsoft paid roughly $60.50 per LinkedIn user. How does that compare to other recent Internet buyouts?
Yahoo! Inc. (NASDAQ: YHOO) paid $111.11 per Flickr user and a whopping $830.23 per GeoCities user.
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.
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