How LinkedIn monetize its services | Business Model – 2020

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If you are a employer or a job seeker, you must have an account on LinkedIn, because it is a platform which allows the employees and employers to get in touch. But how LinkedIn earns and what is LinkedIn business model?

They works on a freemium model in which it provides basic services for free, but if you are an active recruiter, then you have to pay for posting job recommendations and same for the job seeker.

Moreover it offers an application and a website as an online platform for all these things. Let’s understand in deep, how LinkedIn business model helps them generate revenue. Let’s discover about LinkedIn first.

Table Of Contents

  1. About Founder and CEO.
  2. History
  3. Services
  4. How it became the most common social platform for job seekers in comparison to its competitors?
  5. How does LinkedIn earn?
    1. Talent Solution
    2. Marketing Solution
    3. Premium Subscription
  6. Investment, Acquisition and Future Aim
  7. Conclusion
  8. FAQs related to LinkedIn.

About Founder and CEO

It is an American based company founded on 28 December 2002. It was founded by Reid Hoffman, Konstantin Guericke, Jean-Luc Vaillant, Eric Ly, Allen Blue, headquartered in Sunnyvale, California, United States. However, LinkedIn launched its service in May 2003.

About-LinkedIn
About LinkedIn

In June 2019, Microsoft acquired the company.

The CEO of the company is Jeff Weiner, who previously worked in Yahoo Inc.

Key People

FounderReid Hoffman, Konstantin Guericke, Jean-Luc Vaillant, Eric Ly, Allen Blue
CEOJeff Weiner
ChairmanReid Garrett Hoffman CBE
Key Person

History

The company was founded in December 2002 by Reid Hoffman and founding team members from PayPal and Socialnet.com. They got Series A funding from Sequoia Capital in 2003.

Also the website reached 1 million users in August 2004. Specifically in March 2006, they achieved its first month of profitability. And in April 2007, it reached 10 million users.

And Also they launched the mobile application in February 2008. Moreover in June 2008, Sequoia Capital, Greylock Partners, and other venture capital firms purchased a 5% stake in the company.

Let’s discuss the funding round

Funding RoundInvestment Received
Series A Nov 2003$4,700,000
Series B Oct 2004$12,800,000
Series C Jan 2007$53,000,000
Series D Jun 2008$22,700,000
Unknown Oct 2008$352,800,000
IPO May 2011$81,700,000
Unknown May 2013$26,200,000,000
Acquired by Microsoft June 2016$4,700,000
Funding Received

Services

LinkedIn business model is based on employ-oriented service. In particular they provide platform for professional networking which allows recruiters to post jobs and job seeker to apply for the jobs. Also it is said to be one of the best professional social networking platforms.

Professional-Community

It is a community that can help you grow your business, whether that means acquiring new customers, bringing in exceptional talent, or extending your professional network.

The company’s CEO said :-

“Today, we are sharing an exciting new feature that we are rolling out to help freelancers and small vendors to grow their business”

How LinkedIn became the most common social platform for job seekers in comparison to its competitors?

You are already aware that it is a huge social network for professional and job seekers. But how they gain a big market share.

If you want to know about any business you surely search it on google, and google shows top results from LinkedIn. Thus, this shows that it has a huge network and all companies and business are listed there and all the information about the organization can be found there.

Traffic-for-B2B
Traffic By LinkedIn

It is very powerful tool not only for business exposure but also for personal branding as every professional has a profile on it. The profile, which includes all its history, for instance, where did he studied and from where he completed his graduation and what all experience he has.

LinkedIn-Website
LinkedIn Website

It is a professional website so it is recommended to provide Curriculum Vitae (CV).

The company provides a social network only for professional, which make it so popular almost all big organizations and businesses are registered on it. This helps researcher’s to find about all business on the website, and it also provides job and internship opportunities which is one the main reason of its popularity.

Also watch this video which will help you get everything about LinkedIn Business Model

How does LinkedIn earn?

LinkedIn business model and revenue model is simple.

The company makes money by providing job candidates to the corporate recruiting departments of large companies through its recruiter product. The company also generates revenue from display advertisements and by selling of its premium membership subscription to individuals.

They basically earn from 3 main sources:-

Talent Solution

They sell recruitment services which in known as Talent Solution, which means providing talent to the employers and employees.  To enumerate, it has two parts, firstly Hiring and secondly Learning and Development (L&D).

Hiring help recruiters to hire and learning and development helps employees to develop the skills and learn new things.

Marketing Solutions

It allow user to display advertisements. They also provide “sponsored updates” for target audience. There are mainly 3 types of advertisements which LinkedIn allows which are as follows :-

LinkedIn-Advertisements-Types
LinkedIn Advertisements Types

Premium Subscription

Premium subscription allows user to use extra feature which are provided by them like track who saw their profile, contact member outside their network, etc. It also provides sales solution which helps sales person to generate quick leads through social media network.

LinkedIn-Business-Model
LinkedIn Business Model

Here are the pricing of premium subscription of LinkedIn :-

LinkedIn-Subscrription-Plan
Subscription Plans

Investment, Acquisition and Future Aim

As LinkedIn is a professional network platform, they focuses on something which help them out for making their services best.

So, they had introduced “Economic Graph”, inspired by Facebook’s social graph. However, the goal was to create a digital map of the world economy. They are working on to include all the job listing in the world, of all the companies accordingly.

In fact, they had also used economic graph data to research several topics on the job market, including popular destination cities of recent college graduates, areas with high concentrations of technology skills, and common career transitions. 

The company provided the City of New York with data from economic graph showing “in-demand” tech skills for the city’s “Tech Talent Pipeline” project.

Here are some companies which are acquired by them : –

DateCompany NameServices they provide
August 4, 2010MspokeAdaptive personalization of content
September 23, 2010ChoiceVendorSocial B2B Reviews
January 26, 2011CardMunchSocial Contacts
October 5, 2011ConnectedSocial CRM
October 11, 2011IndexTankSocial search
February 22, 2012RapportiveSocial Contacts
May 3, 2012SlideShareSocial Content
April 11, 2013PulseWeb / Mobile newsreader
February 6, 2014Bright.comJob Matching
July 14, 2014NewsleWeb application
July 22, 2014BizoWeb application
March 16, 2015CareerifyWeb application
April 2, 2015Refresh.ioWeb application
April 9, 2015Lynda.comeLearning
August 28, 2015FliptopPredictive Sales and Marketing Firm
February 4, 2016ConnectifierWeb application
July 26, 2016PointDriveWeb application
September 16, 2018Glint Inc.Web application
May 28, 2019DrawbridgeMarketing Solutions
Acquisitions

About LinkedIn

FoundedDecember 28, 2002
LaunchedMay 5, 2003
HeadquartersSunnyvale, California, U.S.
Area servedWorldwide
FounderReid Hoffman
Allen Blue
Konstantin Guericke
Eric Ly
Jean-Luc Vaillant
CEOJeff Weiner
Key peopleShannon Brayton (CMO)Christina Hall (CPO, SVP)Steve Sordello (CFO, SVP)
Employees (2019)15,000+
ParentMicrosoft Corporation
URLwww.linkedin.com
Registered Users660+ million members (December 2019)
About LinkedIn

Conclusion

Thus, LinkedIn served as a platform for professionals, recruiters, and job seekers. The company identified the untapped opportunity of connecting the employees with their potential recruiter.

In conclusion, they diversified themselves in learning and providing educating content too. For this purpose, they acquired Lynda. Also, they provided all solutions related to big businesses and organization and their professional social presence, which benefits the businesses.

FAQs

How LinkedIn works?

LinkedIn enables us to create network and build our professional portfolio, and also helps us in look for a new job.

Can LinkedIn help me getting a job?

Yes LinkedIn is a website which helps you to get a job.

Can LinkedIn help me getting Sales and Leads?

LinkedIn should not be used to sell. It’s a great prospecting tool. But this will destroy the lead generation if you sell early without any timing.
Use it to get possibly interested people to join your marketing funnel.

Who acquired LinkedIn?

On 19 June 2016, Microsoft acquired LinkedIn.

Can LinkedIn help me develop in my skills and learning?

LinkedIn has a learning platform, namely LinkedIn Learning which helps in developing new organizational and personal skills.
LinkedIn-Leaning

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Read how IKEA became the big player of the market: https://indieseducation.com/ikea-business-model

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