Five reasons why Microsoft should not have acquired LinkedIn

Sooraj Shah
clock • 3 min read

How can Microsoft justify the hefty $26.2bn price tag?

4. Forget relationships - profit matters

handshake-suits

To make matters worse, Microsoft is spending $26bn (£18bn) on a company that reported an annual loss of $8m. LinkedIn's stock plunged 43 per cent when the company announced that loss, sinking to a three-year low of $110 in early trading and wiping $11bn off the firm's value.

Despite a growing user base and an increase in revenues, the company hasn't quite worked out how to make a profit, which begs the question: how does Microsoft see LinkedIn growing its own revenues? And will it see a return on investment on the $26bn it will pay?

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