Like most business people, I have been on LinkedIn for many years diligently building my network and accepting invites regularly. Only recently, has my firm begun to see the real value of the network. We are not alone, as Microsoft certainly sees tremendous value in LinkedIn as evidenced by the monster $26 billion price tag they agreed to last week.
This deal is a classic case of the buyer seeing tremendous strategic value in an acquisition. LinkedIn is not merely a profit stream to Microsoft but acceleration into the social media fast lane for business. Microsoft will now own the world’s largest digital rolodex and control a social network that feeds directly into their cloud-based offerings.
So what thoughts ran through my head when I heard the wedding bells?
1) Social media is a huge value driver: Every business – whether a consumer facing or business facing, needs to prioritize their LinkedIn, Facebook and social media online presence. Your business’ social network can have huge value unto itself. Social is a huge driver of credibility, reputation and affiliation – key elements of any marketing strategy.
2) If you build it, they will come: No really, they will. LinkedIn is a unique platform with a large objective: to socially connect the business community. While they struggled at times with a revenue model, they built a highly differentiated platform which can not be easily replicated. They were the first to market, and are getting paid handsomely for this.
3) Distribution Drives Value: The larger your user channel, the more valuable your company. The more distributed your customer base and the riper you are for cross-sale, the more you will get paid.
4) Big Tech growth is slowing: Microsoft has great offerings on the cloud but can only grow so fast. This acquisition allows them to cross-sell their offering to millions of new customers and turbocharge their growth rate.
To learn more about the mergers and acquisition process or about funding options for middle market growth, please contact me at [email protected] or visit us at www.attractcaptial.com.