LinkedIn: The Background and Financial Overview

Linkedin is an internet employment social network and service that was founded in 2002 by co-founder Reid Hoffman. Reid had a good resume with working at companies such as Google, PayPal, and Ebay. He recruited a few friends who had previously were executives at SocialNet, PayPal, Microsoft, Electronic Arts, Yahoo, and TiVo who ultimately became the 4 other co-founders of LinkedIn.

(From left to right Reid Hoffman, Eric Ly, Jean-Luc Vaillant, Allen Blue, and Konstantin Guericke.)

LinkedIn was officially released on May 5, 2003 and by the end of its first month had over 4,500 members. LinkedIn was one of the first social media platforms, while also being a platform based around both professional connections and job opportunities. Early into LinkedIn’s’ life cycle they added in the ability to import your address book in order to invite colleagues and to make more connections. By 2004 the platform had just over 1,217,000 members, and just another year later they were already up to over 4,000,000 members. In this same year LinkedIn started to offer subscription plans to their members. In 2006 the number of members raised by another 1,000,000 users and gave the ability to have a profile that was able to be seen by anyone who searched for it, like the way Facebook works. On 2007 the number of users increased to over 17,000,000 which was a massive jump to the previous years. Reid Hoffman at this time also decided to step down from running the company so that he could concentrate on innovation within the company, after stepping down Reid chose

Dan Nye to run the company. By 2008 LinkedIn opened to an international market and put out a French and Spanish version to its members, which had almost doubled from the previous year. They also launched a mobile app, for on the go linking. The next year LinkedIn went through another change in leadership with

Jeff Wiener who is still currently the CEO. In 2010 LinkedIn started to grow at an extraordinary rate with over 90,000,000 million members by the end of the year, and with over 1,000 employees in 10 offices in the United States and across the Atlantic. The next year their users increased yet again to 135,000,000 users, and the company also got a listing in the New York Stock Exchange at $45 a share. Also, in 2011 they added in the apply with LinkedIn option in order to easily apply through the product 2012 was an important year for LinkedIn, this s the year their interface was updated, in order to make the experience easier to use. LinkedIn celebrated their 10-year anniversary in 2013 and celebrated with over 225,000,000 users. They also lowered the minimum age so that people could start their professional experience earlier. Since 2013 to today LinkedIn has been bought by Microsoft for $26 billion, has had a large redesign again to make the experience easier to use, as well as released many other opportunities to for its users. Currently LinkedIn has almost 600,000,000 users in around 200 Countries and is only growing.

Financial Overview

In 2016 Microsoft acquired the very successful LinkedIn for $26.2 billion. In order to make a deal this large, you must have some sort of belief and proof for the company’s success. LinkedIn has been offering subscription plans since 2004, and currently have 4 tiers. One tier being Premium Career at $29.99/month. This tier provides your profile being higher up when either a recruiter or another person searches up qualities or experience that are under your profile. It also gives you the ability to Compare yourself to other applicants that are going for the same job, and Lastly gives you small tips to improve your profile, and your career. The next tier is Premium Business at $59.99/month. This tier gives you more concise linking possibilities in order to grow your profile, as well as promote your own business. This tier also gives tips on how to improve your brand profile in order to enhance it. The third tier is Sales Navigator pro at $79.99/month. This tier unlocks sales opportunities which gives you the ability to find more leads by searching in target areas, and to better build trusted relationships with customers and prospects. The last tier is Recruiter Lite (Hiring) which is $119.99/month. The last tier gives you the ability to find candidates faster, contact talent directly and to better build relationships with future hires. A total 39% of users pay for at least one of these tiers. 39% of 600 million is 234 million users that pay for some sort of subscription. If 234 million users pay for just the cheapest subscription plan LinkedIn would take in $7.02 billion a month. Clearly many users pay for more than just the cheapest plan, so this number is on the lower side of LinkedIn’s true monthly earnings. Of course, by the end of the year LinkedIn does not make over $84 billion, much of this money goes into things like salaries and wages, new product development, growing the industry, among many other things. Before the Microsoft merger LinkedIn’s total profit was around $2.3 billion in 2017 (Microsoft had taken over late in the fiscal year). In 2018 after a full year under Microsoft their total revenue was at $5.3 billion.

Work Cited

“About LinkedIn.” About LinkedIn, LinkedIn, https://about.linkedin.com/.

Gregersen, Erik. “LinkedIn.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., https://www.britannica.com/topic/LinkedIn.

“LinkedIn History: The Road To 300 Million Members.” Top Dog Social Media, 5 Dec. 2017, https://topdogsocialmedia.com/linkedin-history/.

Potter, James. “The History of LinkedIn.” The LinkedIn Man, 22 Jan. 2017, https://thelinkedinman.com/history-linkedin/.

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