LinkedIn and online education website lynda.com are on a mission to raise — or at least update — the US workforce's skill set.
That, at least, is the raison d'etra provided for LinkedIn's $1.5 billion stock-and-cash acquisition of lynda.com. Presumably given the numbers involved – this is the largest acquisition to date for the professional social networking site – the deal will also give a much-needed boost to LinkedIn's revenues.
Addressing the Skills Gap
For now, though, the market is focusing on the synergies of the two companies, which admittedly are very compelling.
Based in Carpinteria, Calif. lynda.com offers a wide range of online courses to further a career, ranging from business to foreign language instruction to leadership body language to web design, digital photography and programming. All together, it offers more than 4,000 courses and 100,000 video tutorials users can take.
LinkedIn, for its part, has the largest database of professionals in the world, Lynda.com founder Lynda Weinman noted in her announcement of the news -- professional whom can potentially benefit from self-paced study of new skills.
The benefits of marrying this functionality with LinkedIn will go far in addressing the skills gap in today's workforce, she said.
"Jeff Weiner, CEO of LinkedIn, and I both believe that the skills gap is one of the leading social issues of our time -- technology, changes fast and people need to keep their skills up to date. We have a shared vision of connecting relevant knowledge to those in need of new or stronger skills, and believe that together we can positively impact the global job market and economy."
Not Just Another Tool
Weiner's own comments about the acquisition suggest that lynda.com will be more than just a passive tool for LinkedIn users.
LinkedIn' fundamental value proposition is connecting people to opportunity, he said. He pointed to the network's nearly 350 million members that can use LinkedIn to find a job, build a business or just be more successful in their careers.
"However, matching talent and opportunity is a simplified take on the equation," he continued. "Without access to education and the ability to acquire skills, many of these opportunities will remain far out of reach for most people."
"With today’s announcement that LinkedIn intends to acquire lynda.com, LinkedIn has taken a material step forward toward connecting these dots."
Together, he concluded, "we can more easily build the Economic Graph by mapping together the people, jobs, skills, and knowledge that are core components of it."
The acquisition is bound to shake up the nascent but rapidly growing online education space. It is populated by such players as traditional universities that charge almost traditional tuition prices for online offerings to free online courses from other universities to online, for-profit ventures, of which Lynda.com is also part.
"This acquisition is a clear signal that online education companies have reached a stage of growth where investors and technology market leaders are taking notice," said Dennis Yang, CEO of Udemy.
Not surprisingly, of this range of options Weiner believes lynda.com is the best. "Through its singular focus on programming and content quality, we concluded that lynda.com had developed the best approach for LinkedIn in the industry."
How the competitive landscape will settle after the acquisition remains to be seen, of course. One thing is for certain: with the staid and serious LinkedIn promoting online education, these courses will surely gain more credibility with businesses that still view on-campus education as more beneficial.
For now, the acquisition is creating some interesting observations, including this one from Alan Lepofsky, a vice president at Constellation Research focused on collaboration.