Additionally, the platform has no real competitors. Yes, there are other freelance marketplaces out there, but they are all lacking in one way or another. Fiverr is a bottom-of-the-barrel platform which pays freelancers below minimum wage, while Toptal is not even a marketplace at all.
At the end of the day, however, it might not even matter to Microsoft if the UpWork business model is profitable or not. Instead, what is likely more important is UpWork proving its technology and its ability to show the power of its freelance marketplace for both clients and workers alike.
Predicting the price of UPWK
If the purchase of UpWork by Microsoft is not a matter of “if” but “when”, what can we expect the tech giant to pay for the freelancing upstart? Using Microsoft’s purchase of LinkedIn might give us some perspective in determining the premium Microsoft may pay in this acquisition.
In June of 2016, Microsoft agreed to purchase LinkedIn for $26.2 billion, or $196 per share of LNKD at the time. LNKD had previously set its IPO price at $45. But maybe more importantly, at the time of Microsoft’s acquisition, the share price of LNKD settled close to $130. This means Microsoft paid almost a 50% premium for LNKD given the company’s share price at the time.
