I think the most interesting acquisition LinkedIn could possibly make would be to purchase Monster Worldwide (MWW). Currently, Monster is trading 90% off its 2000 highs, and 65% off its 2010 highs. It appears on track to return to profitability this year, with 15+% growth expected going forward. The best part of this deal is that LinkedIn (8 billion dollar market cap) could buy Monster (1 billion dollar market cap) for almost nothing. This deal would increase LinkedIn’s revenues by over 250% (LinkedIn’s revenues are under 400 million dollars, and Monster’s are over $1 billion). It would increase LinkedIn’s overall profit by over 250% (LinkedIn’s profit next year is expected to be around 36 million dollars, and Monster is expected to earn over 90 million dollars in 2012).
Basically, for an investment that totals only 12% – 15% of their current market cap, LinkedIn could increase their revenue and operating income by over 250%.
That doesn’t even begin to touch on the synergies that this deal could provide. They could begin requiring people to fill out a LinkedIn profile in order to use Monster.com, which would instantly add millions of users to LinkedIn’s database. They could require companies to maintain groups on LinkedIn in order to use Monster (or offer discounts on the services for those using both websites actively), which would immediately increase coirporation presence on LinkedIn.
Those are just the tangible benefits. The intangible benefit is that they would have the almost the entire job posting/resume posting market cornered, and would beneift immensely when the job market turns around (notice that Monster was worth almost 10x more when the job market was going crazy). If LinkedIn believes that the job market will turn around, this would be an amazingly profitable venture for them.
Todd Hagopian received his BA from Eastern Michigan University with a major in Political Science. After graduation, he worked as a Financial Advisor and a Bank Manager before returning to school. He attended Michigan State University, where he completed an MBA with a double-major in Finance and Marketing. Todd is now a Senior Product Development Manager for a Fortune 500 company. He frequently writes about business issues, social media strategy, and political issues that he finds important. Enjoy the blog!