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Businesses Microsoft Social Networks

Salesforce CEO Told LinkedIn He Would Have Paid Much More Than Microsoft (recode.net) 64

Posted by msmash from the aftermath dept.
Ina Fried, reporting for Recode: It was already known that LinkedIn chose a potentially lower all-cash acquisition offer from Microsoft rather than take on the uncertainties of a stock-and-cash deal from Salesforce. But now it has been revealed that Salesforce might have been willing to go "much higher" than Microsoft's $26.2 billion, or change other terms of its bid, had it been given the chance. In a filing with regulators on Friday, LinkedIn said a board committee met on July 7 to discuss an email from Salesforce CEO Marc Benioff. "The email indicated that Party A would have bid much higher and made changes to the stock/cash components of its offers, but it was acting without communications from LinkedIn," LinkedIn said in the updated filing with the Securities and Exchange Commission.
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Salesforce CEO Told LinkedIn He Would Have Paid Much More Than Microsoft More

Salesforce CEO Told LinkedIn He Would Have Paid Much More Than Microsoft

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  • And the real value is probably half (Score:2, Informative)

    by Anonymous Coward

    ...of nothing.

  • Linkedin took the bird in hand (Score:1)

    by Anonymous Coward

    Stock in the acquiring company goes down as soon as the deal becomes public, and the acquirer has to go deeper into debt to complete the deal. Then bad news comes out from either the acquirer or acquiree's latest earnings, key people leaving, etc and the stock falls some more. And there could be random external events like Brexit dropping the entire stock market.

    So cash is king.

    • Re: (Score:2)

      by mysidia ( 191772 )

      Then bad news comes out from either the acquirer or acquiree's latest earnings, key people leaving, etc and the stock falls some more.

      So specify some extra requirements:

      • The price of the deal will be a dollar amount; the stock portion of the debt will be settled through payment to the shareholders of the acquired company by paying them shares worth 2 even dollar installments over the next 2 quarters, and a final payment of the remainder in cash, with the number of shares for each installment determined

      • The problem is that this might mean that the deal is impossible to complete. If the buyer's stock drops too low then they may not ever be able give the amount of stock, or it could end up being 100% of the buyer, which they probably can't agree to. It's too difficult and complex a deal to manage to pull off that I don't think anyone would take it seriously.

        • Re: (Score:2)

          by mysidia ( 191772 )

          If the buyer's stock drops too low then they may not ever be able give the amount of stock, or it could end up being 100% of the buyer

          That's called an Inability to Pay for goods they want to purchase, so now they will be in default on their payments required for the acquisition.

          That means they will have to either book it as an unpaid cash debt or continue to keep the acquisitions' accounting separate, and the original shareholders retain interest in the original company; The transaction changes fr

  • What I want to know is (Score:5, Funny)

    by gijoel ( 628142 ) on Saturday July 23, 2016 @04:47PM (#52567587)
    Will linkedin spam everyone on Microsoft's address book, to invite them to join Linkedin?

    • Does anyone use LinkedIn anymore? It has any value at all? After spamming all my professional contacts and my personal contacts, I was out.

      • How did they get your personal contacts?

        • Re: (Score:2)

          by ShaunC ( 203807 )

          For a good while, if you installed the LinkedIn app on your phone, it would harvest your contacts' email addresses and send them spam for LinkedIn on your behalf. "I want you to join my professional network" or some such garbage. The permissions requested by the app were typical of social networking apps (they all "require" access to your contacts) and there was no indication to the user that LinkedIn would be sending out emails. They stopped this practice after being sued [www.cbc.ca], but the behavior turned a lot of

          • I have never given any social networking app access to my phone contacts. I assume you are on Android?

            • Re: (Score:2)

              by ShaunC ( 203807 )

              I've never installed LinkedIn so I wasn't affected by this, but yes, the Android permission model is what made this possible. Being that it's all-or-nothing, you can't say "OK, I want to install LinkedIn but not allow it to access my contacts." Unless you root your phone, you either allow an app every permission it wants, or you can't install it. My understanding is that the most recent version of Android is supposed to mitigate this a bit, but it's anyone's guess as to if/when carriers will actually push t

        • How did they get your personal contacts?

          When I created my Linkedin account, they asked me for my email address and password. I didn't fall for it, but my wife did, and Linkedin logged in on her behalf and sent email to every single one of her 2000+ contacts, including many casual acquaintances from years ago. This was a sleazy, and maybe illegal, action. They are a very unethical company. I still have a Linkedin account, but I don't trust them, and all my information on Linkedin is public knowledge anyway.

      • Re: (Score:1)

        by vivian ( 156520 )

        I still use LinkedIn in - but probably like every other product Microsoft has bought, it's going to either become more annoying or less functional.
        I used to use hotmail - then Microsoft bought it. I ended up migrating to yahoo.
        I have use skype on Linux for many years, but the product took a turn for the worse after Microsoft bought it - very very infrequent updates (for Linux) and now instead of being able to receive PDF's directly, I am being forced to go to the online version to download and view them.
        I

    • Re: (Score:2)

      by SeaFox ( 739806 )

      Probably the opposite. LinkedIn members will probably soon be receiving regular emails about Microsoft productivity products and SAAS.

  • cycle of life (Score:5, Interesting)

    by e**(i pi)-1 ( 462311 ) on Saturday July 23, 2016 @04:55PM (#52567625) Homepage Journal
    Cycle of life for social network companies: start-up builds up a large user base using free services, indicating a business model with optional services, selling out to a big fish, big fish digests it, squeezing out its gut. Big fish removes free services more and more, adding advertisement. User jumps to new free service. Alternatively: start-up becomes big fish and lives from eating other alive communities, remaining the big fish, as there are no alternatives.
    • This particular big fish has a history of making misguided buying decisions. Has M$ ever bought something that didn't either go under within 10 years of had to be written off the balance sheet?
  • bird in hand, and all that

    • Re: (Score:2)

      by drnb ( 2434720 )

      bird in hand, and all that

      Or more formally, after considering the risk premium one *must* offer *more* when offering stock not cash. Once one considers such a risk premium the stock based offer may actually be the lesser offer even when the hypothetical dollar amount is more.

  • I wouldn't trust either company with any deal that didn't involve cutting me a cheque. I would trust salesforce not at all but at least with a cheque there is a chance they haven't completely screwed you over. With some kind of stock / options deal. Hell no.

    Microsoft has a pretty good history of buyouts resulting in the bought out company pretty much being flushed, so again, regardless of the logic, I would not do a deal that I couldn't have go complete into the toilet and still have my walking away happy

    • In the vein of your post, I just canceled my "Premium" subscription to LinkedIn.

      They say no refunds, pro rata, but I am betting that once I do the research, California law will require such. If so, I will demand it.

      I've had a LinkedIn account since 2002. I will now update my LinkedIn account to contain only a pointer to my own, personally hosted web page (on a VPS). Sure, they will still web-scrape my personal info. But, as a professional and consultant, I need that particular information out there. It

  • I'm not sure I would be able to handle *Force and linkedin under the same roof. That's too much corporate sketchiness in one place. Granted MSFT isn't a whole lot better, but they're slightly more obvious in how they work.

  • What? (Score:3, Insightful)

    by Anonymous Coward on Saturday July 23, 2016 @05:01PM (#52567669)

    How the fuck is LinkedIn worth $26 billion?

    • >> How the fuck is LinkedIn worth $26 billion?

      It's become the Google of recruiting. These days, Monster and Jobs.com seem to be full of job postings that companies need to legally get out there before selecting an internal candidate or hiring an H1-B instead. You're just chasing a lot of phantom jobs out there. However, LinkedIn is where recruiters can research you instead and chase you down for positions they can't otherwise fill, which in my experience has meant a better-than-50% chance of gettin

    • How the fuck is LinkedIn worth $26 billion?

      It is worth what the market bears. Your question should be; Why does the market bear so much?

      • Comment removed based on user account deletion

      • Why does the market bear so much?

        Because it's a bear market. And Microsoft is a has-been who can't make anyone want to "upgrade" to their newest OS even for free. So their future, if they are to have any, is in acquiring other, possibly relevant companies, and that's best done in a bear market when they're cheap.

    • Re: (Score:2)

      by bazorg ( 911295 )

      In terms of actual money changing hands, perhaps this is a way to get a lot of business networking to go through Skype rather than other VOIP services. In a beautiful slide deck that MS is distributing, there are some ideas about how Dynamics CRM and Office365 will use Linkedin, possibly in the same way that G+ contacts can be seen from Google search results and Gmail/Hangout contacts.

      In a broader "let's do stuff for money and offer other stuff for free and hope this somehow works", maybe because it's the o

  • Huh? (Score:4, Funny)

    by c ( 8461 ) <beauregardcp@gmail.com> on Saturday July 23, 2016 @05:05PM (#52567681)

    Microsoft buying LinkedIn for as much as they did was batshit. We're supposed to believe that Salesforce is even further out there and brought more money?

    • Re: (Score:1)

      by Anonymous Coward

      We're supposed to believe that Salesforce is even further out there and brought more money?

      Sure, why not? Hell, I was going to offer twice as much as Saleforce, if MS hadn't beaten me to it.

    • I actually see the value of LinkedIn to SalesForce. There is a potential synergy (I know a much overused word) there that brings benefit to SalesForce, their customers and some percentage of LinkedIn users. With Microsoft buying LinkedIn all of the benefits go to Microsoft (and possibly a fraction of their customers). LinkedIn users gain nothing from Microsoft buying LinkedIn.

      • Re: (Score:2)

        by c ( 8461 )

        I actually see the value of LinkedIn to SalesForce.

        It's not so much a question of whether there's value; it's whether there's more than $26 billion of value to anyone.

        • I really don't know what the value of LinkedIn is to SalesForce, but it is something they cannot get any other way. That makes its value higher than it would otherwise be. Of course, you may be correct that $26 billion is too high. I suspect that Microsoft's thinking was that no price was too high to obtain LinkedIn since, by acquiring LinkedIn they gained something they could not get in any other way. The problem with that from my perspective is that LinkedIn is less useful with MS owning it.

          I suspect th
  • Can the SEC filling have consequences? Can it lead to cancel the sales to Microsoft? Or result in a fine?

    • Re: (Score:2)

      by Scutter ( 18425 )

      I bet there's more than one shareholder lawsuit out of this. It suggests that the board was negligent in conducting due diligence.

    • This will almost certainly lead to a law suite by some large shareholder claiming the board of directors failed to perform their fiduciary duties (specifically their "duty of care" which basically says the board has to perform due diligence on all alternatives and choose the one that's best for the company). Since what's "best" is subjective, this is actually fairly typical and borderline inevitable with any large M&A transaction. There's very often some party that feels the board should have taken so

  • I've seen it before. Companies that would be willing to drop millions (or billions) turned away. Simply because they attempted to lowball their first bid.

    Also, they fail to communicate that this is a preliminary offer, and that if it's not acceptable, there's lots of room for negotiation.

    As such, valuable prizes walk away from them.

  • I removed myself from Linkedin on the very day that Microsoft bought it. I'm not a totally rabid anti-Microsoft, but there's a sustained history of unpleasant business practices. I don't want them in my professional life, such as it is, at 65. People may say (somewhat rightly) that I have that option.

    However, here is a thought experiment. If everyone closed their Linkedin account, then Microsoft is immediately out $26 billion, no rioting, no police or lawyers, nothing. This is rather beneficial flip side

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