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25 Million Reasons Why LinkedIn / Microsoft Will Buy Coursera

And why this would be good for both universities and for lifelong learners.

May 24, 2018
 
 

Y’all need to tell me if I’m crazy. From where I sit in the ivory tower, free of the burdens of either useful knowledge or accountability for my prognostications, it seems obvious to me that LinkedIn / Microsoft should buy Coursera.

In fact, I said exactly that back in 2014 - Should Microsoft Acquire Coursera?  Since I wrote that piece, Microsoft went on to buy LinkedIn for $26 billion in 2016. That was one year after LinkedIn acquired Lynda.com for $1.5 billion.

My spidey-sense has been tingling for a while now that LinkedIn is gearing up for a major play into the postsecondary space. Alternative credentials make the most sense -- and that is where Coursera comes in.

You need to know 5 numbers to grasp the value of Coursera.  

The most important number is 25 million. That is the number of registered lifelong learners the platform. That is aggregated demand.

The other numbers are: 149 (university partners), 2,000+ (courses), 180+ (specializations), and 4 (degrees).

What happens when you marry the data that Coursera has on its lifelong learners with the data that LinkedIn has on its users?

Here is what you get.

First, you gain the ability to create online courses around networks -- not just content. Imagine a course that is tailored specifically tailored to your network. In participating in the course, you are automatically in a community of professional colleagues that you either know, or have some connection.

Building courses at scale around networks would overcome the major challenge of MOOCs. That is the reality that learning is social, and open online courses are too often impersonal.

Second, the integration of the Coursera and LinkedIn platforms would accelerate the shift to alternative credentials. The courses (and the credentials) could be crafted against employer demand - as LinkedIn is able to match skills with jobs. Does any platform have better data on the relationship between employer demand and employee supply?

LinkedIn could leverage these data to inform the creation of courses and program, one’s carrying the credentials (certifications) that employers want.  LinkedIn would then be able to demonstrate the value of the Coursera credential by matching employment outcomes with individual training histories.

Finally, a Coursera acquisition by LinkedIn (as Microsoft seems to be allowing the company to run autonomously) would solve the biggest problem of the open online learning platforms. That problem is that Coursera doesn’t create and run its own courses and program and degrees. That work is done by the universities.

Schools do not create as many courses, programs, and degrees as they should because doing so is expensive. There are high fixed and opportunity costs. Moreover, the revenue model that supports the creation and running of the courses is from the learner purchasing the credential.

The real value, however, is in the data. An acquisition by a platform company like LinkedIn would unlock the value of that data -- freeing up the appropriate capital to invest in the development of new courses, programs, and degrees. Coursera learner data gets much more valuable when integrated with LinkedIn user data.

Back in 2014 I wrote that Microsoft could probably purchase Coursera for $200 million. Seems cheap now, with Coursera valued at $800 million -- with a $1 billion valuation just over the horizon.  

So a fair price for LinkedIn (Microsoft) to buy Coursera is what -- $1.5 billion?

I still think that would be a great deal.

Actually good for Coursera, good for universities, good for LinkedIn (Microsoft), and good for lifelong learners.

Microsoft, through LinkedIn, should make a long-term strategic bet on learning at scale and on alternative credentials.

There should be more money for universities to bring their faculty and their expertise to all the global learners who will never matriculate as “traditional” students at their institutions.

Does the fact that this all seems so clear to me mean that I’m dead wrong? What am I not seeing?

Are you less sanguine than I am about the possibility of a LinkedIn / Microsoft acquisition of Coursera?

Are other folks looking at Coursera, and thinking that “wow” -- this is an incredibly valuable platform that needs to find a way (the data) to unlock all that potential value?

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