Microsoft’s LinkedIn Acquisition: LinkedIn’s Users Valued At More Than Facebook’s

June 14th, 2016 by Trefis Team
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LNKD: LinkedIn logo
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LinkedIn

Microsoft (NASDAQ:MSFT) is acquiring LinkedIn (NYSE:LNKD) for $26.2 billion in a bid to complement its enterprise software and enterprise cloud offerings with LinkedIn’s professional network. The deal price values LinkedIn at a 50% upside compared to its closing price Friday. In this note, we look at how this price values each LinkedIn user and how LinkedIn compares with the other social media giants on this front.

It is evident from the following calculation that with a $26.2 billion valuation, LinkedIn’s monthly active users are valued at $248, which is 23% more than Facebook’s users, and over 7.5x of Twitter’s active users. LinkedIn is also ahead of the other two companies in generating revenue per user, which at $28.30 per year is almost 3x that of Facebook and about 4x that of Twitter.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for LinkedIn
3) Please provide your valuable feedback at content@trefis.com.

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