I'm a customer of both LinkedIn and Microsoft. Heck, I wrote the first draft of this article on MS Word. And the news that Microsoft bought LinkedIn caught me by surprise.

Let's start with the worry that's probably on a lot of LinkedIn members' minds: Will Microsoft screw things up for us?

Setting that concern aside, let's look at the price tag--$26.2 billion--and what it means for ordinary users. In fact, I think it amounts to a giant gift that Microsoft just gave every LinkedIn member.

It's not that we'll see any of that money, of course. And it doesn't mean there's no reason to be a bit wary of what LinkedIn will turn into now. However, in the process, Microsoft is giving us all the gift of information--and a very personal computation at that.

The magic number is $249.52.

The $26.2 billion price tag works out to $196 per LinkedIn share (a big premium over its closing last Friday, $131.08). So what is Microsoft getting that makes it so willing to pay much more than the rest of the free market?

The answer: Us. People. Profiles.

Take $26.2 billion, divide it by 105 million, which is the total number of active members on LinkedIn, and you get $249.52. And that tells us exactly what our professional information and allegiance--yours, mine, and virtually everybody we know--is worth.

Of course, LinkedIn has other assets--technology, patents, other intellectual property. But all of that simply supports its members--or more to the point, all of that simply entices the 105 million of us who use the site actively to stick around.

So, what happens next?

We should point out that LinkedIn actually claims to have a sum total of 433 million members worldwide. If you divide the purchase price by that price, you get $60.50. However, that includes everyone who ever created an account--including all those tiny, untended accounts with a handful of connections and a work history that hasn't been updated since 2011.

It's pretty clear where the real value lies.

Of course, your guess is as good as mine as to what happens next. Microsoft insists that LinkedIn will continue to run, unfettered, as a separate company. But there's no way they went out to acquire a hundred million new customers at nearly $250 each, without plans to push other products on them quickly.

Will it mean that LinkedIn simply becomes an extension of Microsoft Outlook (or vice-versa)? Or that your LinkedIn login will suddenly reveal that you've logged into the Microsoft Network? Will they wind up renaming the entire platform?

Time will tell. For now, just think about your $250 gift. It might be someone else's money, but it represents knowledge that no one can take away.

Published on: Jun 13, 2016