It was really exciting to read about Microsoft acquiring LinkedIn for an astronomical sum of $26 billion, translating to 91 times LinkedIn's current EBITDA!!
Well, the basic calculation of Satya Nadella and his team behind this acquisition is to boost sales of Microsoft's Office 365 and Dynamics, to the LinkedIn users, numbering 35 million in India alone.
I am reminded of Microsoft's acquisition of Hotmail in 1999, for a princely sum of $400 million dollars!!! Would anyone care to put a value to Hotmail today?
While the maths behind arriving at a valuation of $ 26 billion is best left to Satya and his team of negotiators, the key question which should now be uppermost in the minds of Microsoft's top brass is :
"How can we convince the various users of LinkedIn to move beyond their key objectives of career moves and networking with like minded professionals, to considering Office 365 and Dynamics as the best of its kind in the field of cloud and CRM space?"
Well, the dominance of Gmail in the email space is well known displacing Hotmail from its premier position. Satya and his team need to be vigilant enough not to let history repeat itself.
