Microsoft Purchases LinkedIn: How Much Are You Worth As A User? by Mikey Tom, PitchBook
Microsoft’s recent purchase of professional social network LinkedIn for $26.2 billion has been the talk of the industry this week, and for good reason. Some herald it as the largest sale of an internet company ever. Others argue that the sale could hold M&A implications for other large tech companies, most notably Twitter, which has seen its stock struggle for the better part of a year now.
One of the more interesting topics we saw discussed was how much Microsoft was paying for each of LinkedIn’s reported 433 million users, and how that figure compares to other transactions. With that in mind, we compiled a list of similar companies that either have exited or are currently public to see how this deal’s $60 price per user stacked up. It turns out, it’s definitely on the higher end.
Couple of notes:
- We only included companies that were either acquired or have gone public, as the value of the company has been somewhat validated. Private company valuations are a whole ‘nother animal, but keep an eye out for a similar post in the near future calculating this metric for notable startups.
- Price per user was calculated as acquistion price or recent market cap/number of users.
- The number of users is based on figures found at the time of acquisition. For Facebook and Twitter, they are current monthly active users.
Here’s the data we used to estimate price per user, including details like purchase date, price and acquirer: