LinkedIn, the social network for professionals that was recently acquired by Microsoft in a massive $26 Billion deal, has come up with its results for the 2nd quarter of 2016. The company has managed to top Wall Street expectations by a fair margin. While there are people saying that the results don’t really matter anymore, they do, because they show that Microsoft made a really smart, calculated acquisition.
Coming to the 2nd quarter result, LinkedIn announced $932.7 million in revenue and earnings of $1.13 per share as compared to the 78 cents per share on $898 million in revenue predicted by market analysts. The company joins Facebook, Google and a few other top corporations who have had a really good quarter and have managed to beat Wall Street expectations. However, the company for obvious reasons, desisted from hosting a conference to announce the results.
In light of the pending merger, LinkedIn will not be updating its outlook for fiscal 2016 and will not be hosting a conference call for its second quarter 2016 business results
User wise, the company now has 450 million cumulative members and 106 million monthly unique visitors. And you can not really compare LinkedIn’s userbase with that of any other social networking website in terms of value. While almost all social networks derive profits from user data, LinkedIn is pretty special on this count. Since its user base mainly consists of professionals, the data it is capable of serving up has a huge value to companies looking to sell their products or recruiters looking to make a hire.
Consider the example of Microsoft. The company has a large portfolio of enterprise services. Now with LinkedIn, it will have a unique insight upon how it can best leverage its enterprise services for maximum profit and outreach. This will end up helping its business target the right customers and grow.
Meanwhile, Microsoft’s generous, $26 Billion acquisition also has the effect of wiping away most of the losses accumulated by the company in the 4th quarter of 2015. If you remember, LinkedIn shares went into a massive plunge after a disappointing 4th quarter and stock values almost halved. The event led to a reassessment of the company’s core business and indeed, opened the doors for potential acquirers to make their bid.
Salesforce, Google and Facebook were also believed to be in the running to acquire LinkedIn at a time. However, Microsoft triumphed and managed to seal the deal that will see LinkedIn become part of the wider Microsoft ecosystem by the year end.