Many people wonder if it is possible to purchase LinkedIn, the popular professional networking platform owned by Microsoft. LinkedIn has over 850 million members and operates the world’s largest professional network on the internet. With so many users and a valuable brand, LinkedIn would likely be an extremely expensive acquisition. However, Microsoft has not indicated any plans to sell LinkedIn since acquiring it in 2016 for $26.2 billion. So while it may seem attractive to buy LinkedIn, it is not actually available for purchase by individuals or companies.
Background on LinkedIn
LinkedIn was founded in 2002 and established itself as the premier social network for professionals. Users create profiles summarizing their background, experience, skills, and interests. They then connect with other users they know and trust to build an online network. LinkedIn enables networking opportunities, job searching, recruitment, professional content sharing, and more.
Some key facts about LinkedIn:
– Founded in 2002 in Mountain View, California
– Currently headquartered in Sunnyvale, California
– Went public in 2011 with one of the largest tech IPOs at the time
– Acquired by Microsoft in 2016 for $26.2 billion in cash
– Currently has over 850 million members in more than 200 countries
– Generated over $10 billion in revenue in 2021
– Mission is to “connect the world’s professionals to make them more productive and successful”
LinkedIn is the most profitable social media platform thanks to its focus on professional networking and branded content. It has established itself as an invaluable tool for recruiters, job seekers, marketers, and anyone looking to establish professional connections.
Microsoft Ownership
In 2016, Microsoft acquired LinkedIn in one of its largest acquisitions to date. Microsoft paid $26.2 billion in cash for LinkedIn, far surpassing LinkedIn’s market valuation at the time. This demonstrated LinkedIn’s immense value based on its user base, data, and future revenue potential.
Since the acquisition, LinkedIn has become an integral part of Microsoft’s product portfolio. LinkedIn data has been integrated across Microsoft offerings like Office 365 to provide richer user profiles and improve workflows. LinkedIn also provides Microsoft a strong presence in the professional networking space to complement other products like Microsoft Teams.
With LinkedIn firmly entrenched as a core Microsoft product, it is highly unlikely Microsoft would ever sell it off. LinkedIn is strategic to Microsoft’s customer base growth and data capabilities. Selling it would create a major gap in Microsoft’s product ecosystem.
Valuation and Size
LinkedIn was valued at around $26 billion when acquired by Microsoft in 2016. Today, its valuation would be substantially higher based on revenue growth over the past 6+ years. In 2021, LinkedIn generated over $10 billion in revenue, demonstrating the immense value of its user base and data.
With over 850 million users, LinkedIn operates the world’s largest professional networking platform. The breadth of its user base across the globe would be enormously difficult and expensive to replicate. These network effects make LinkedIn more valuable as the user base grows.
Any acquisition of LinkedIn today would likely cost upwards of $50 billion. With continued revenue growth and network effects, the price tag will only get higher over time. The size and scale of LinkedIn makes it an extremely expensive, challenging acquisition target.
LinkedIn’s Independence Within Microsoft
While owned by Microsoft, LinkedIn still operates fairly independently. LinkedIn has its own CEO, Aatif Awan, and management team directing the business. This operating independence has allowed LinkedIn to stay focused on its core professional networking mission.
The relative independence post-acquisition was likely an attractive aspect for LinkedIn when considering Microsoft’s offer. It has enabled LinkedIn to maintain its distinct culture and continue product innovation in line with its brand identity.
LinkedIn clearly has a close relationship with Microsoft leadership, but the day-to-day operations are handled by LinkedIn’s executives. Major corporate changes or a potential sale would require joint decisions between LinkedIn and Microsoft leaders. Overall, LinkedIn has significant autonomy to chart its own course within the Microsoft family.
Hypothetical Acquisition Costs
Although LinkedIn is not actually for sale, it can be useful to estimate what it could hypothetically cost for another company to acquire it:
– **LinkedIn company valuation:** Approximately $50 billion+ based on 750+ million users and $10+ billion in annual revenue
– **Acquisition premium:** It’s common for acquisitions to come at a 30-50% premium above market value. This accounts for the additional value of acquiring full control.
– **Final hypothetical sale price:** $75+ billion as a reasonable premium offer a new owner would have to pay.
At a $75 billion+ price point, only a handful of major tech companies could realistically afford buying LinkedIn outright. Companies like Apple, Amazon, Alphabet (Google), or Meta (Facebook) would conceivably have the resources for such a large acquisition. Still, it would be a major undertaking even for tech giants due to LinkedIn’s size and integration with Microsoft.
Alternative Investment Opportunities
Since an outright acquisition of LinkedIn is unrealistic, below are some alternative ways to gain investment exposure:
– **Invest in Microsoft stock:** Microsoft trades publicly (NASDAQ: MSFT) and LinkedIn contributes strong revenue growth to Microsoft’s bottom line.
– **Invest in competitors:** Other professional networking platforms like XING could potentially benefit from overflow demand if LinkedIn adopted usage fees.
– **Buy professional networking ads:** LinkedIn advertising can reach a targeted B2B audience and generate leads. Brands can benefit from LinkedIn’s audience without owning the platform.
– **Sponsor LinkedIn content:** Pay to amplify content and associate your brand with high-quality professional content.
– **Grow organic LinkedIn presence:** Build an influential brand profile with high-quality content, engagement, and follower growth.
These options allow brands and professionals to capitalize on LinkedIn’s value without actually acquiring the company outright. Investing in Microsoft stock is the closest option available to gain exposure to LinkedIn’s financial upside.
Conclusion
In summary, LinkedIn remains a wholly-owned subsidiary of Microsoft with no plans for Microsoft to sell it. The professional networking platform is an integral asset in Microsoft’s product portfolio and plays a key strategic role in its growth. Any hypothetical acquisition of LinkedIn would likely cost over $75 billion – an extremely high price tag reserved only for major tech giants. While not realistically actionable, estimating LinkedIn’s hypothetical value and acquisition costs illustrates the immense worth of its professional user base and network effects. For those looking to buy into LinkedIn’s upside, investing in Microsoft or increasing their presence on LinkedIn organically are more practical options.
Year | Valuation | Key Events |
---|---|---|
2002 | $5 million | LinkedIn founded |
2008 | $1 billion | 20 million users reached |
2011 | $4 billion | IPO at $45 per share |
2014 | $22 billion | Acquired Lynda.com for $1.5 billion |
2016 | $26 billion | Acquired by Microsoft for $26.2 billion |
2021 | $57 billion | Revenue exceeds $10 billion |