The same people who valued Nokia ($7.6 billion writedown) and aQuantive ($6 billion writedown)?
It seemed mostly negative.
A case in favor of the acquisition might go something like this:
1. Microsoft was far, far behind in mobile, with little hope to catch up through internal efforts alone. "Winning" mobile had the promise to unlock a lot of new revenue across Microsoft's other business units, "losing" mobile threatened to restrict Microsoft to the stagnating desktop market.
2. The industry was already consolidating (Google buying Motorola), there was a looming patent war, Nokia was sitting on a ton of patents, and was one of the few (if not the only) good target left for acquisition.
3. CEO of Nokia was ex-Microsoft, so Microsoft likely had a good idea what they were getting. (Conversely, this could mean Nokia CEO knew exactly how to apply lipstick to a pig to get it sold).
In short, limited time window to act, potential for dramatic growth for Microsoft if it works out, relatively small downside if it doesn't (IIRC the cost was something like 10% of Microsoft's cash reserves at the time). I'd take that bet to be honest.
All of this is speculation of course (I have no inside knowledge), and it was clearly not worth it in the end, but I can understand why a decision like this might have been made.
A good deal of M&A goes ahead despite the warnings from the DD team. Sometimes it's a matter of CEO ego, sometimes a strategic long shot overruling the red flags.
The problem with Nokia was with the disaster of Microsoft's mobile strategy.
(I'm sure someone at MS has an answer to this, it's just that they haven't been tremendously successful in the past with their big acquisitions; I don't think Skype or Nokia paid off. And in general tech companies often buy other companies without much apparent success. Why is it so crazy to doubt their wisdom in any particular instance?)
1. Integrate Skype into LinkedIn 2. Add a shared chat screen (video group chat)
This will allow many Human Resources to perform interviews more efficiently (in return to subscription). I can imagine many other new attractive features MS could easily add (e.g. syntax highlighting in group chat).
Works in browser, no account, encrypted by default.
That's the best remark in the whole thread. Employee poking at competitors. Sales teams looking up the right people to connect with. Thanks to the LinkedIn share button, like Facebook, they can have parts of your browsing history. I don't even know whether the purchase should be allowed.
This also gives MS some great data to possibly feed into the team that manages their investment portfolio. How valuable would it be to have a (admittedly not perfect) feed of employee growth/deflation for various companies? That would also provide a ton of leverage for future acquisitions, etc.
There's a LOT you can learn from LinkedIn data if you have access to the unfiltered data.
In terms of data mining this is still a huge price-point, but obviously some team at MS projected the benefits vs expense.
Beyond the expansion in potential revenue models, it's rational for Microsoft to spend their cash on things that cement their dominance in the workplace, particularly as Apple and Google could always choose to make a hard push into that space. Assuming LinkedIn continues to dominate as a professional network, Windows 15 Powered By LinkedIn is a hell of a moat to cross.
But in most other lines of work, the recruiters don't knock so often (or so cluelessly) ... and the access to other people's profiles actually is quite handy. Sales. Finance. Media. Education. Law. Non-profits. It's a long list.
It's anyone's guess whether Microsoft can execute the bulk of its strategic plan for LinkedIn. But the plan is not foolish.
I don't really get this - it's weird to me that when I meet other developers at meetups or conferences or wherever, it doesn't seem "cool" to connect on LinkedIn, but nothing else fills that same role. I'm happy to trade GitHub profiles, but unless both of us do most of our interesting work in the open, which statistically we don't, then that's a much less informative profile.
I'd go further and say it is a global corporate social network (unlike, say Yammer, which is a local corporate social network).
I agree that this is a fantastic play by MS. When I am researching both job candidates and employers, LinkedIn is one of the two resources I use (Google being the other).
And yes, a lot of my colleagues are very frequent users of LinkedIn for sharing and discussing business related stuff. With that said these tend to be non-techy people. Techy people tend to use sites like HN instead.
To make that happen they'll have to put up even more barriers to messaging people out-of-band. Much like Upwork/etc.
Sure, we can debate its usefulness, how popular it is outside of IT, etc. But I think across the board, no one LIKES LinkedIn.
And I do think the general sentiment towards Facebook is much more positive than LinkedIn.
Obviously most engineers don't.
By that simplistic reasoning no big company would ever make a mistake.
Seems more like a partial swing towards enterprise-emphasis.
That kind of justification has almost always gone wrong.
Its a great acquisition. But is the price justified?
The only real complaint about this purchase would be that LinkedIn was overvalued. And I wouldn't bet on that since Microsoft surely sent a big team of their brightest cookies to make a valuation of the company.
But other than that, LinkedIn fits: it is a corporate social network, if you will. I know that "corporate social network" is almost an oxymoron, but bear with me. It is social in the sense that users register and interact with each other just as on a regular social network, but ultimately the service is corporate focused. LinkedIn has created one of the biggest and best maintained databases of employment information (and of possible business contacts) in the world. As TheArcane said, LinkedIn is "Facebook + Monster on steroids".
If you don't believe me, try to speak to people you know, active professionals outside of the IT sector and see how many of them have LinkedIn profiles. Better yet, talk to people who are not in employer-dominated sectors (i.e. not like IT, where the demand for qualified workers greatly exceeds the supply).