Whats Your Data Worth?

Further look at the value of data in context.

What’s Your Data Worth?
James E. Short and Steve Todd   in SloanReview

Many businesses don’t yet know the answer to that question. But going forward, companies will need to develop greater expertise at valuing their data assets.

In 2016, Microsoft Corp. acquired the online professional network LinkedIn Corp. for $26.2 billion. Why did Microsoft consider LinkedIn to be so valuable? And how much of the price paid was for LinkedIn’s user data — as opposed to its other assets? Globally, LinkedIn had 433 million registered users and approximately 100 million active users per month prior to the acquisition. Simple arithmetic tells us that Microsoft paid about $260 per monthly active user.

Did Microsoft pay a reasonable price for the LinkedIn user data? Microsoft must have thought so — and LinkedIn agreed. But the deal generated scrutiny from the rating agency Moody’s Investors Service Inc., which conducted a review of Microsoft’s credit rating after the deal was announced. What can be learned from the Microsoft–LinkedIn transaction about the valuation of user data? How can we determine if Microsoft — or any acquirer — paid a reasonable price?  ... "