Why LinkedIn Acquired Lynda Instead of Building Similar Content Internally
Introduction:
LinkedIn's acquisition of Lynda raises an intriguing question: If replicating similar content could be done for less, why did they opt to purchase Lynda instead? Delving into this, we examine the strategic and operational factors behind the decision, highlighting why acquiring Lynda was not only attractive but also necessary for LinkedIn's growth trajectory.
Profit and Demand: The Case for e-Learning
Profit: The e-learning market presents a compelling opportunity for growth due to its low overhead costs and its fundamental value proposition to the business community. Unlike physical products that require significant investment in infrastructure, digital content can be sold with minimal additional effort.
Demand: The demand for skills training within the business world is constant and growing. As technology evolves, the need for continuous learning among professionals and HR departments becomes more critical. This inherent demand aligns perfectly with LinkedIn's objectives to enhance its offerings and provide comprehensive solutions for its users.
Strategic Decisions Beyond Cost: Revisiting the Acquisition
Customer Base and Market Share: Acquisitions aren't solely driven by the cost of the commodity. The acquisition of Lynda was more about enhancing LinkedIn's market position, tapping into a robust customer base, and leveraging the existing market share of Lynda. Lynda had a significant presence in the online training and education sector, providing LinkedIn with the opportunity to scale quickly without reinventing the wheel.
Ecosystem and Brand Reputation: LinkedIn recognized the value of Lynda's brand and reputation. As a well-known and trusted name in online learning, Lynda's branding alone could help LinkedIn establish itself as a leader in this domain. The acquisition allowed LinkedIn to leverage the existing user base, driving organic growth without the need for extensive marketing campaigns.
Why LinkedIn Answers Failed to Match Quora
Core Business Focus: LinkedIn is a career-oriented networking platform. Building an extensive e-learning library and educational resources was not within its core competency. Instead of investing in a costly internal project that would take years to develop, acquiring Lynda allowed LinkedIn to focus on its primary business objectives—networking, job searching, and professional development.
Efficiency and Time to Market: It's often more efficient to acquire an existing solution than to develop one internally, especially for large companies with limited time and resources. Lynda had already built a substantial membership database and sophisticated infrastructure for managing online video tutorials and training programs. Acquiring Lynda meant that LinkedIn could access these resources immediately, rather than spending years developing and validating its own platform.
Conclusion: The Value of Scale and Expertise
In summary, LinkedIn's acquisition of Lynda was a strategic move that addressed multiple business objectives. The combination of Lynda's established user base, strong brand recognition, and comprehensive content library provided LinkedIn with the agility and scale needed to expand its offerings. By focusing on its core competencies and leveraging Lynda's expertise, LinkedIn could effectively position itself as a comprehensive resource for professional learning and development.