Phil Friedman

5 years ago · 1 min. reading time · visibility 0 ·

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Why Are These Guys So Happy?

BECAUSE THEY'VE SOLD LINKEDIN TO MICROSOFT FOR MORE THAN TEN TIMES WHAT IT SEEMS TO ME TO BE WORTH...


I am not a financial expert, not even a run-of-the-mill financial or investment analyst. Nor am I a statistics whiz or genius quant. I am not even an accountant.

I'm just an ordinary small-business guy, who long ago stopped investing in stocks because I couldn't figure out how share prices bore any relation to the value of the companies involved.

Certainly not to hard assets, or to net worth, even if one allows net worth to include soft assets, like "good will", whatever that means. Nor, moreover, to any reasonable multiple of historically established net earnings or even gross revenues.

So, now I read that Microsoft is buying LinkedIn for $26.2 billion...

And being the financial yahoo that I am, I look at that amount, and it seems to me so way over the moon, that I have to ask what is it I am missing.

For example, I go to the revenue and profit stats for LinkedIn for the past five years. and this is what I find:


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Author's Notes:  You liked this, you may want to look at my "If I Say So Myself" series of philosophical musings with an edge. An index of some of my previously published philosophical reflections can be found at"

"If I Do Say So Myself —  An Index of Blog Posts"

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About me, Phil Friedman:  With 30 some years background in the marine industry, I've worn numerous hats — as a yacht designer, boat builder, marine operations and business manager, marine industry consultant, marine marketing and communications specialist, yachting magazine writer and editor, yacht surveyor, and marine industry educator. I am also trained and experienced in interest-based negotiation and mediation. In a previous life, I taught logic and philosophy at university.


The (optional-to-read) pitch: As a professional writer, editor, university educator, and speaker, with more than 1,000 print and digital publications, I've recently launched an online program for enhancing your expository writing: learn2engage — With Confidence. My mission is to help writers and would-be writers improve the clarity of their thought, master the logic of discussion, and strengthen their ability to deal confidently with disagreement.

To schedule an appointment for a free 1/2-hour consult email: info@learn2engage.org
                



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Comments
Javier 🐝 CR

Javier 🐝 CR

5 years ago #7

#6
#5 we have to think about it and how to notify all your contacts on LI. CC Alberto Anaya Arcas

Javier 🐝 CR

Javier 🐝 CR

5 years ago #6

#6
Phil Friedman

Phil Friedman

Phil Friedman

5 years ago #5

#5
Excellent question John Vaughan. Perhaps Javier C\u00e1mara Rica?

Phil Friedman

Phil Friedman

5 years ago #4

A LOT OF PEOPLE SEEM TO THINK THAT THIS ACQUISITION DOES NOT BODE WELL FOR THE ALREADY FALTERING LINKEDIN, AND THAT THE FIELD IS OPEN FOR A SUCCESSOR...

Phil Friedman

Phil Friedman

5 years ago #3

I've been told,, Javier C\u00e1mara Rica, that Fortune and Time magazines are lining up with me on the question of value. But you can say, you heard it first in the buzz son beBee 😄

Dean Owen

Dean Owen

5 years ago #2

Let me repost my Li comment here: I am reminded of when the Japanese, at the might of their economic dominance, bought the Rockefeller center. This seems a stupidly high price to pay for a database of numerous partially filled profiles, inactive accounts, fake profiles. Search for John Smith and you get over 48,000 results, but by page 2, many of them don't have a profile picture. And just imagine how bad candidate search will be if they employed Bing technology. I know how bad Bing is as I live in a country where Google is banned.

Mohammed Abdul Jawad

Mohammed Abdul Jawad

5 years ago #1

Ugh...LinkedIn turned millions of users into potential profiles, then transformed them into profits. Oh, what a dainty deal...before LinkedIn takes time and investment to correct its loopholes, LinkedIn found a prospective suitor!