LinkedIn connects with online training platform Lynda.com in a big way. Its $1.5 billion acquisition is the professional networking site’s biggest deal to date. LinkedIn CEO Jeff Weiner has been vocal about the role of professional development in closing the skills gap, but a prominent analyst thinks his company paid a hefty price to do so.
A screenshot from the site of Lynda
Piper Jaffray’s senior research analyst, Gene Munster, says “No, we weren’t surprised. We were surprised at the magnitude. But as far as the category, they are getting into more professional development, that piece of it is something they have hinted to investors that they would be doing, so this category around development makes a lot of sense. The billion-and-a-half dollar price target was a little bit of a surprise.”
LinkedIn shares rose slightly on the news, but it may take investors awhile to digest what Lynda means for LinkedIn’s long-term success.
“I think the reason the stock is not moving higher is that it’s going to take a little bit of time for investors to appreciate the importance of them having development as part of their key offerings.”
Lynda operates on a subscription basis, which may be in the thousands, with consumers edging out corporate users. It may be awhile before Lynda impacts LinkedIn’s bottom line, but the immediate impact will be user engagement.
“LinkedIn will find different ways to make money from Lynda longer-term. But it’s going to take some time for those monetization opportunities to develop. They just want to get your more attention and time, and this is a new way that they can do that.”
As LinkedIn integrates Lynda, Munster says, don’t expect the company to make any more acquisitions in the near-term.
Ventuno