One of the biggest ever acquisitions done by LinkedIn is the acquisition of an online educational firm 'lynda.com',which it bought for $1.5 billion. It is the fourth largest deal in social media history. Acquisition is a combination of 52 percent cash and 48 percent shares. This is the 15th acquisition done by LinkedIn so far and worth of this acquisition is more than 3 times the worth of all its previous acquisitions combined.
So what goes into spending such a huge amount? What is this deal all about? Let's explore....
Lynda.com is basically an online educational firm providing access to a large pool of videos in various fields. It is a video library where people could get access to videos in the field of Design,Web,Photography,Business,3-D Animation etc. It charges on the subscribed videos,rather than showing it for free. The company is a veteran in this field and has its presence for over 18 years.
The move is significant for LinkedIn as it looks to generate more revenue from 347 million users of lynda.com. LinkedIn plans to integrate the online video services of lynda.com to its own website,hence it plans to attract the user base of lynda.com. Moreover it has become essential for LinkedIn to engage the users in its platform as user engagement is the most important metric that every company is focused upon, which is evident from Facebook holding talks with publishers to host news content and engage its users. Secondly,LinkedIn is a platform where recruiters look for suitable candidates.So it can integrate the videos into its platform where suitable candidates can acquire required skills or certifications and can endorse these skills in LinkedIn. This could be fruitful for recruiters as they can look for candidates based on the possessed skill set or they can recommend any video to the candidates to develop required skills that maybe required in the industry. So it's a win-win situation for both LinkedIn and lynda.com as candidates can get themselves trained and acquire skills by subscribing to online videos and the recruiters can find suitable candidates based on the required skill set. In this way,LinkedIn can get access to more college students on its platform who are about to enter the job market. LinkedIn may expand its reach to schools,colleges and businesses that are using lynda.com platform for e-learning purposes.
Another reason for acquiring lynda.com is the growing importance of video and e-learning.Videos are considered to be the prime source of growth in the future,that we could already see from the competition between Facebook and YouTube videos. So providing unique videos of lynda.com in the timeline of LinkedIn will let people spend more time in LinkedIn and may result in getting more revenues from people as they subscribe to or purchase these videos.
The success of LinkedIn will totally lie on how efficiently it integrates and promotes the videos provided by lynda.com into its own platform and how does recruiters and students get to benefit from it.
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