Making sense of Microsoft’s acquisition of LinkedIn | The Economist

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"There are three main challenges to Microsoft’s plans. It is shelling out the equivalent of around $250 for each monthly user of LinkedIn to purchase the firm. To keep shareholders happy, it will need to add users to LinkedIn’s platform more quickly or be clearer about how it can make more money from their data.

The second is Microsoft’s poor track record with big deals. Its purchase of Skype in 2011 for $8.5 billion has been no runaway success. Microsoft squandered over $6.3 billion on aQuantive, an online-advertising firm that it bought in 2007, and $7.2 billion on Nokia’s handset business in 2014. Both disasters happened before Mr Nadella took over, but “the historic playbook says it’s not going to work,” reckons Brent Thill, an analyst at UBS, a bank. Mr Nadella intends to keep LinkedIn as an independent company, perhaps because he has seen the pitfalls of integrating large acquisitions at first hand."

Making sense of Microsoft’s acquisition of LinkedIn | The Economist