How does LinkedIn Make money? Insights into LinkedIn Business model

LinkedIn is a business and employment oriented service that is available in the form of the website as well as a mobile app. Your profile works as your resume and others can access to your professional information like your current job profile, previous job profile and your experiences.

How LinkedIn Got Started?

LinkedIn was founded by famous venture capitalist Reid Hoffman with a motive of creating a community of professionals to connect with each other. Mobile version of LinkedIn was launched in February 2008.LinkedIn bought by Microsoft in February 2016.

LinkedIn Funding Rounds

In 2014,Confluent has invested $6.9 M. G2 Crowd has raised it to $23M in May 2017.

In 2018, it has reached up to $50M by SalesLoft as shown in fig1.2.

Funding Rounds

Fig 1.1

 

Fig 1.2

Fig 1.3

 

Source

Revenue Model of LinkedIn

   Premium Subscriptions

LinkedIn is easy to operate and free to join but it empowers with limited features like – Filtered search options, no inmail credits, filtered search credits, you may also know credits, who viewed your profile numbers.

   Corporate Solutions

Corporates can utilize LinkdIn for the advertising purposes

* Contextual ads

* Sponsored post

* Menu bar ads

   Recruiter Solutions

Corporates can utilize LinkedIn for these things

* Finding candidates

* Posting Jobs

How does LinkedIn Work?

LinkedIn makes nothing or alongside nothing from 99% of its individuals; the 22,000 corporate customers and around 500,000 premium enrollments make up over 75% of revenue income

There exists critical potential in the advertising business, however improving the advertisement income may rip apart other more beneficial territories of the business.

LinkedIn is an incredible example of a “freemium” business model; the greater part of the site and highlights are accessible for nothing out of pocket to all clients, with esteem added premium items accessible just to paying clients.

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LinkedIn Business Model

Customer segments

There are total three segments of the LinkedIn business model. Obviously, the first segment includes internet users who go to the site and create a profile on it.

The second one includes recruiters who are looking for the talents and want to recruit them.

Third one includes advertisers who want to reach their target audience.

Value propositions

LinkedIn enables normal internet users to utilize their professional skills and talent. It allows them to network and build the relationships.This whole process is free of charge.

For recruiters, LinkedIn provides an attractive tool to find and identify great talents. It provides CVs’ with reference and wealth of information which is not usually available in standard CV. All the CVs’ are structured and easily sortable. Through this recruiter can find and identify great talent with less efforts.

In case of advertisers, they can choose their target audience and can reach to them.

Key activities

Key activities for LinkedIn include platform development, it can be measured by a number of active users on LinkedIn. So it requires a platform which increases the number of active users and which keep them engaged and active on the site. Everything else is less important as it only needs to keep raising the value bar to maintain its reputation.

Key Partners

Major key partners include data centers and infrastructure which keeps the platform online.

Channels

Main Channels through which people reach to the Linkedin are website and mobile app.

Customer relationship

LinkedIn enables users to build a profile and connect with each other in an online social network site, Member can invite anyone to become a connection.

Revenue streams

Free offering as well as premium subscription available for those who want to use advanced services.

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Advertisers pay when the advertise clicked by the users(Pay per click or cost per click).

Some elements like Inmail are also chargeable.

Users can learn the various skills through Lynda(LinkedIn learning platform).

Cost structure

The main cost is web hosting cost to keep the platform online. Other major cost incurred for product development and to increase the product value.

Marketing and sales as well as the general cost can also be included in cost structure.

How does LinkedIn Make money?

Business Solutions

LinkedIn can be used to grow your professional network. Every user has a different set of requirements like finding a new opportunity, searching talented employees, marketing a specific product, search for specific lead..etc.The LinkedIn Business Solution can fulfill most of the needs.

The Linkedin Business solution is a collective name for all the premium services offered by LinkedIn. It includes-

Premium subscription

Premium subscription enables a user to unlock certain features which are not available for users.

Premium subscription includes advanced facility provide to premium users. The subscription includes

1)Career

A Premium Career subscription gives the user access to enhanced features and benefits when researching and applying for jobs.

2)Business Plus

Through this subscription users can find the target audience and connect with them, thus users can promote and grow their business.

3)Sales navigator

Sales navigator makes social selling easy through sales tools that focus on helping users to find right prospects and build trusted relationship with them.

4)Recruiter lite

Through this subscription, users can find and hire talented candidates faster.

Marketing solutions

LinkedIn is not only a great recruitment platform but also provides great marketing solutions to marketers.

LinkedIn marketing solution enables companies to create a company page. Companies can enhance their marketing efforts by creating sponsored content, sponsored InMails and text advertisements.

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Talent solutions

It is most important service provided by LinkedIn. Through this service companies and recruiters can find talented employees as well as capable partners.

This service includes LinkedIn recruiter, job slots, recruitment media, career pages, and work with us ads.

Sales solutions

This solution can help a ser to grow his sales through various social selling strategies and tools like InMail, lead recommendation, saved leads..etc.

Recruitment solutions

It is the lighter version of talent solutions, through this subscription user can get access to automatic candidate tracking, smart suggestion, integrated hiring..etc.

Acquisitions

LinkedIn provides e-learning platform and slides hosting service through Lynda and SlideShare.

Through Lynda user can learn creative skills, software, and technology through videos. Lynda is the most recent acquisition by LinkedIn.

SlideShare is a web2.0 based slide hosting service, which enables the user to upload files in the various formats like PowerPoint, open documents or PDF. SlideShare services are free for every user.

Why LinkedIn is better?

LinkedIn has a clearer motive and great revenue model which is not depended on only advertisements.LinkedIn provides a facility by which people can search jobs and make their life better.

LinkedIn has an upper hand over other social networking sites as time spent on this social network isn’t considered as the time wasted by the users.

How to Start a Social networking site similar to LinkedIn?

After going through these interesting facts about LinkedIn if you also want to start your similar social networking platform then check out connectin at an affordable price.

Take a look at other interesting business models from the social media industry.

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Sneha can be found writing and developing all sorts of creative content,specialized in eCommerce,business model,startup,industry watch..etc.

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1 Comment
  1. Such an informative article. The Business model & revenue model of LinkedIn has been elucidated very well. I’m interested in your product connectin.

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