Microsoft’s acquisition of LinkedIn: A status update on the deal, 18-months later
by Annotote TLDR 2019.01.14
Since the deal closed, LinkedIn as a standalone entity has materially increased both its own revenue (+571% from the first full quarter of consolidated reporting) and its own gross margin (filings mention subjectively that the broad segment’s gross profit growth is outpacing opex growth, attributable to LinkedIn and Office 365: “Gross margin increased [by] 18%, driven by growth in Office Commercial and LinkedIn [including] gross margin percentage improvement in LinkedIn and Office 365.”)
Interview: Satya Nadella (Microsoft CEO) on recent acquisitions, ambitions, and the future
by Ben Thompson (Stratechery) 2019.01.19
The Github acquisition to me was fundamentally driven by that, when I sort of said “what’s the next big community of users in every business?” it’s going to be developers. And in fact, the LinkedIn data was what showed us that the number of developers outside of the tech sector is growing faster than in the tech sector.
Interview: Jeff Weiner (LinkedIn CEO) on the Microsoft acquisition at its 3-year anniversary
by CNBC 2019.12.27
Microsoft’s [CFO] said the main goal of the acquisition was to accelerate growth at LinkedIn, as well as the Office 365 and Dynamics 365 product lines… Potential integrations were definitely part of Microsoft’s original pitch for buying the company. The presentation featured six “illustrations” of the two companies’ products coming together [including…]
• A unified professional profile that would show LinkedIn details in Windows and Office applications. Microsoft has made inroads here, and the LinkedIn integration will be coming to the Outlook app for Android in 2020.
• An “Intelligent Newsfeed” in LinkedIn that draws on activity from Microsoft Office apps. This isn’t available today, although LinkedIn has tapped Microsoft services such as translation to enhance the feed.
• Microsoft’s Cortana virtual assistant telling users about relevant LinkedIn information. This isn’t available today.
• Tools that managers can use to better understand employees’ work activity. This isn’t available today…
• Weiner [himself had also] mentioned several Microsoft products that it would be “incredibly exciting” to integrate with, including Active Directory and Skype. To date LinkedIn has not touted integrations with those things…
• [In addition,] earlier this year… LinkedIn said it would adopt Azure [Microsoft’s cloud] after depending on its own infrastructure for years… “And when you start to commingle that data, it becomes more valuable. So organizations will be able to run analysis and queries…”
LinkedIn is still growing its user base — there are now 660 million members, up 52% from when Microsoft bought it — and LinkedIn contributed $6.75 billion in revenue in the 2019 fiscal year… up 28.4% on an annualized basis. Although revenue growth hasn’t exploded under Microsoft, ranging between 25% and 37% since 2018, growth was slowing down significantly when Microsoft bought it… its performance is ahead of plan for the last three years [although in] its fiscal-year ended June 2018 [operating losses] widened by $63 million to $987 million — a drop in the bucket compared with Microsoft’s overall net income of $16.57 billion that year. The company didn’t provide an update on LinkedIn’s profit or loss [in 2019].
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