Like everyone else in Silicon Valley, I woke up this morning to the news that Microsoft is acquiring LinkedIn, my former employer, for $26B, or $196 per share. A bunch of folks have been asking me what I think, so I’ll try to summarize my thoughts here.
Let’s start with the obvious: this is fantastic news for LinkedIn shareholders. LinkedIn entered 2016 with a share price of $225, but the stock took a beating in February that left many people wondering whether it had finally succumbed to gravity. An all-cash deal at a 50% premium over the current valuation is about as sweet a deal as a shareholder could ask for.
As for employees, I’ve only started to talk to my friends there, and their reactions are pretty raw. But, as I expected, they’re ambivalent. Of course they’re happy about the 50% jump in the value of their stock. But most of the people I worked with at LinkedIn didn’t sign up to work with a company as large as Microsoft. I expect that Jeff is sincere in his promise to preserve LinkedIn as an independent entity, but that’s easier said than done. Still, I suspect that things won’t change much for LinkedIn employees, at least in the short term. The biggest challenge I envision is hiring: the appeal of a job at Microsoft is very different than the appeal of a job at LinkedIn.
And, much as I care about the impact on shareholders and employees, I’m more intrigued by what the acquisition means for the ecosystem. Will a LinkedIn backed by Microsoft’s resources make smarter long-term investments in hiring, marketing, and selling? Will integration with Microsoft’s products and services unlock new opportunities? Or will being part of a bigger company cause LinkedIn to lose motivation and focus? And what does this mean for other players — particularly startups — with the ambition to disrupt LinkedIn’s core businesses, particularly in the hiring space? We’ll learn more in the next months.
I’m happy for everyone who comes out ahead — particularly for my friends who still work at LinkedIn. And I hope Microsoft proves to be a good steward of the value LinkedIn has created.
But I can’t help hoping that the acquisition emboldens startups to take a crack at what many have perceived to be an impenetrable moat. LinkedIn needs and deserves the competition.