Lots of reasons why I'm not drinking the megadeal Kool Aid. First and foremost, Microsoft has a history of writing large cheques on splashy acquisitions, most of which either never go anywhere (Skype) or quite literally crash and burn (Nokia, aQuantive).
While acquisitions can be an effective means of establishing presence in fast-evolving tech sub-sectors like enterprise social (it's faster to buy an existing, substantive and successful player than it is to develop the technology and eminence on your own), the cultural challenges of integrating a player like LinkedIn into its day-to-day operations and strategic vision are monumental, and Microsoft wouldn't be the only tech titan to run into headwinds on the integration front.
LinkedIn's more recent difficulties with flatlined user and revenue growth, which decimated its share price prior to today's announcement, reinforce the belief that Microsoft is paying a serious premium for a second-rate target. It's hard to see where the $26.2 billion U.S. in differential future value is going to come from - or why Microsoft felt compelled to offer such a massive premium for LinkedIn when no one else was apparently ready to make a similar deal.
We're 13 years into LinkedIn's history, and a similar amount of time into the social and enterprise social timelines. The company and the enterprise social media sub-sector are closer to middle-age than anything else, and you'd think the offer size would reflect the fact that this company's and its market's best days may no longer be ahead, but behind.
So, yes, I'm a bit cynical. But I'm hardly alone: Microsoft shareholders pushed its stock price down following the announcement this morning.
I discussed my concerns with BNN's Michael Hainsworth in a live interview earlier today. Here's the link.
Your turn: Do you use LinkedIn? If so, why? If not, why not?