Word on the street is that News Corp. is about to purchase LinkedIn. Some time ago I compared TheLadders with LinkedIn, and included News Corp. as one of the many potential acquirers of the business social networking service, but I certainly did not put them atop the list.
I think News Corp.’s Rupert Murdoch wants to get an option on all online assets. He was miffed that YouTube did not go his way and I think that every company on the Web will invariably be seen as a fit with News Corp. for the simple reason that offline, News Corp. spans the globe and all media. Online - after $2B in investments and acquisitions of MySpace, IGN, Scout, Photobucket - Fox Interactive Media is a force to be reckoned with.
The point is: any company can find a home in FIM or News Corp.
In this case, the recent $5.7B acquisition of Dow Jones makes the acquisition of the most popular business social networking site is pretty darn reasonable, especially when you consider just how much operational leverage LinkedIn would give FIM and News Corp.
The main reason why LinkedIn is a good deal is that Rupert Murdoch is aiming for $1B in digital revenues for FIM, the problem is, all of the pageviews and ad impressions on MySpace won’t achieve that as easily as he’d like. IGN, too, is not showing the kind of growth that Murdoch envies. But much like WSJ gave Murdoch the world’s most valuable audience in print (and arguably, online), LinkedIn bolsters that audience and allows Murdoch to leverage his advertiser base to really drive rates and revenues across both his offline and online empire.
This one is smart for many additional reasons:
- Facebook is encroaching on LinkedIn’s turf as a business communications tool (I get more and more business emails off Facebook, which is odd, but to be expected)
- Facebook is encroaching on MySpace’s turf as the leading social networking site, even though MySpace remains gargantuan in size
- MySpace is invariably going to become a bigger commercial platform for merchants
- MySpace is already the leading media and entertainment promotional tool in the world
- MySpace is not really an effective tool for business networking for professionals, and as such, LinkedIn (which would remain separate, I am not suggesting merging the two at all) would complement Fox Interactive Media’s coverage across social networking quite well.
- LinkedIn would really complement News Corp.’s business assets, including Dow Jones’ Barrons, Marketwatch.com and yes, Wall Street Journal’s WSJ.com sites.
All in all, Linked In - who has hinted at an IPO but failed to get Silicon Valley nearly as excited as Facebook - would not cost FIM all that much. I’d say in the same ballpark as Photobucket, which fetched $250M. But devoid of actual financials, I am just guessing.
Subscribe: