As an outsider looking in, LinkedIn's purchase of Lynda.com looks like an odd duck in comparison to their previous acquisitions[1].
As far as I can tell, the Lynda.com brand name isn't that well known outside of tech circles. (Virtually all of their courses are Adobe, Microsoft Office, and web development, etc) I'm guessing those computer courses are relevant to less than 5% of LinkedIn's user base. It was very recently (last year or so) that Lynda started doing more business courses[2] (how to calculate ROI, how to write a business plan, etc) Since those business courses are probably their thinnest and weakest offerings, I can only speculate that it was a partly a "proof-of-concept" to show a prospective acquirer (such as LinkedIn) the breadth of topics the content platform could deliver.
In that case, LinkedIn is really buying Lynda's content delivery platform (the technology) as opposed to seeing value in the existing portfolio of courses (the copyrights).
It will be interesting to see how it plays out. I'm somewhat saddened that a controversial company like LinkedIn (UI dark patterns, creepy privacy invasions) was the one who bought them. I would have preferred a company like github (synergy with code sharing) or Apple (enhance iTunesU) to do it. Unfortunately, github doesn't have the cash/stock and Apple is busy with more grandiose plans.
Linkedin will do well pushing computer courses because "getting into tech" looks attractive to the 90% of people stuck in lousy jobs. They're looking to cash in on a webified version of the "bootcamp" movement. They have a great audience - people make Linkedin profiles because they are job hunting.
And anyone who takes an HTML class makes the list of profiles returned from a recruiter's search longer. And for the spam recruiters LinkedIn tends to serve, a longer list is more valuable.
> It was very recently (last year or so) that Lynda started doing more business courses
That's provably untrue even according to your own source [0] (when sorted by oldest first). They have videos from 2010 in their business skills section like "Pitching Projects and Products to Executives." And many added in 2011.
Heck I myself watched several business courses on Lynda over three years ago...
Sorry I didn't make it clear. I wrote "more" as in "more business courses" to indicate an uptick in frequency. I wasn't claiming they had zero business courses before 2014.
EDIT ADD: Lynda.com also see themselves as strategically expanding into more business, marketing, professional development, and executive management courses. See their 2014 presentation at 47 seconds: https://youtu.be/qlYKbfjru5I?t=47s
Linkedin is paying for the content and ongoing business model. Lynda had $100M in revenue in 2014. Sure LinkedIn could have replicated the content but they are taking an existing business that works, building on it, and assuming that by marketing it via linkedin.com they can expand Lynda to a larger audience.
It's not the technology, but the brand, customer base, content, and growing business that Linked In is investing in.
Lynda.com has been working incredibly hard for quite a few years to build up their business, so I'm really happy to hear that they've been reward for all the hard work and excellent execution.
I disagree with the other replies saying that LinkedIn bought Lynda for the content. I still think it's the technology. Technology is not just Lynda's programming of their public facing website servers. Tech could include competency of content workflow from concept-to-release that the Lynda executive team has mastered. Generating lesson scripts; post-production of on-screen annotations, scheduling studios, etc. Technology also includes software to manage relationships with authors and pay correct royalty checks.
If we break out components of Lynda.com for purposes of valuation, we might have:
+ customer base
+ content library
+ executive team and their programming staff
+ technology platform
Yes, Lynda.com has an existing customer base and an obvious way is to look at the recurring revenue and make projections on it. However, I discount the customers because I'd guess that Lynda subscribers are the kind of tech savvy users that are very jaded about LinkedIn's shady business practices. It seems like the sentiment among these subscribers is to declare their separation from LinkedIn as a badge of honor. I just can't see that the executives from LinkedIn allocating the bulk of their $1.5 billion price for these customers.
As for "content library", their existing portfolio consists mostly of timely courses that will become obsolete within months. How valuable is the "2009 Adobe CS4 Essential Training" or "2011 Learn iOS 5" course? It's not like Sony buying the Beatles song catalog which can be milked year after year. Because most tech courses have limited shelf life, the copyrights on the existing content library does not explain the 1.5 billion. Yes, new courses will be created but Lynda's authors are basically independent contractors. They are not handcuffed into multi-year exclusive contracts.
To me, this leaves the "executive team, programming staff" and "technology platform" as the components with the most value to LinkedIn. If I do some more armchair speculation, I can think of one way to make the $1.5 really pay off:
Dramatically expand Lynda.com's offerings so that it's more relevant to the general public. The 2015 Lynda.com they bought was 95% software tutorials and 5% business, but the transformation that LinkedIn envisions would be a content portfolio of 95% business, paralegal, welding, and other topics relevant to the 95% of job seekers not doing software dev work. Imagine a future where young people who talk about lynda.com (if the brand name is not gone) to say "TIL lynda used to be mostly Adobe/MSOffice/HTML courses."
The current Lynda.com customer base & courses portfolio is much too niche for it to be the main reason for the 1.5B price tag. On the other hand, LinkedIn can leverage the well-oiled content production pipeline that Lynda has mastered to create other material that the non-tech population would pay for and that will potentially pay back multiples of that $1.5B. In other words, the future customers that Lynda doesn't have today will vastly outnumber the current customers and that future scenario is what LinkedIn bought into.
If you believe LinkedIn thought Lynda's content was more valuable than Lynda's delivery platform, I'd like to hear your reasoning.
As far as I can tell, the Lynda.com brand name isn't that well known outside of tech circles. (Virtually all of their courses are Adobe, Microsoft Office, and web development, etc) I'm guessing those computer courses are relevant to less than 5% of LinkedIn's user base. It was very recently (last year or so) that Lynda started doing more business courses[2] (how to calculate ROI, how to write a business plan, etc) Since those business courses are probably their thinnest and weakest offerings, I can only speculate that it was a partly a "proof-of-concept" to show a prospective acquirer (such as LinkedIn) the breadth of topics the content platform could deliver.
In that case, LinkedIn is really buying Lynda's content delivery platform (the technology) as opposed to seeing value in the existing portfolio of courses (the copyrights).
It will be interesting to see how it plays out. I'm somewhat saddened that a controversial company like LinkedIn (UI dark patterns, creepy privacy invasions) was the one who bought them. I would have preferred a company like github (synergy with code sharing) or Apple (enhance iTunesU) to do it. Unfortunately, github doesn't have the cash/stock and Apple is busy with more grandiose plans.
[1]http://en.wikipedia.org/wiki/LinkedIn#Acquisitions
[2]http://www.lynda.com/Business-Skills-training-tutorials/484-...