1.

What was the purchase price of LinkedIn?What is Microsoft's return on this investment to date?[10]On what economic or strategic basis can this acquisition be justified?There is no specific right answer to the last part of the question.You may want to read Goedhart et al (2017, see table 5 below) and identify three possible acquisition strategies that Microsoft adopted for its LinkedIn purchase.

Table 5.The six types of successful acquisitions:

• Improve the target company's performance

• Consolidate to remove excess capacity from industry

• Accelerate market access for the target's (or buyer's) products

• Get skills or technologies faster or at lower cost than they can be built

• Exploit a business's industry-specific scalability

• Pick winners early and help them develop their businesses

Harder Strategies:

• Roll-up strategy

• Consolidate to improve competitive behavior

• Enter into a transformational merger

• Buy cheap

2.

Microsoft announced that it expected the acquisition is to be accretive to non-GAAP earnings within two years.What does non-GAAP mean in this case?In other words: what major expense is excluded?How do you feel about the use of non-GAAP numbers in corporate communication?Is it legal?Please research FASB and SEC pronouncements on this issue, possibly including but not limited to Anders (2017), Golden (2017) and SEC (2018).