How Does LinkedIn Make Money?

how does linkedIn make money

The benefits that LinkedIn provides to individuals and the business world are immeasurable. The platform serves many purposes, such as no need to visit other sites for recruitment and business growth. And it also allows you to build a healthy professional network where users can engage with like-minded people.

As the online presence and use of the internet continue to expand, so does the use of LinkedIn.

But do you know what LinkedIn’s business model is and how it generates money? If you are interested in browsing the website’s ‘back channels,’ here are some exciting tidbits about LinkedIn and its business model that you often won’t find elsewhere.

So, let’s explore the canvas in more detail.

A brief history of LinkedIn

Founded back in 2002 in Silicone Valley by Reid Hoffman and Allen Blue, LinkedIn is the largest social media website for all professional users.

And still, after almost 20 long years, it keeps growing by leaps and bounds and continues to be a successful platform for millions of users.

Furthermore, LinkedIn changed its official status in 2011, and it moved to the stock market as a public traded organization. In 2011, the company experienced a major infrastructure overhaul but for good reasons.

For LinkedIn, 2012 was evolutionary. The company changed its focus and introduced new concepts: simplify, grow, every day.

Moreover, in 2012 LinkedIn launched different influencers and platforms in eight new languages and its official app for an iPad.

LinkedIn by the Numbers:

  • Headquarter –Microsoft took over LinkedIn for a hefty amount of $26 billion back on June 13, 2016.
  • Current CEO – LinkedIn’s current CEO is Jeff Weiner since 2009.
  • Launched date – 2002.Headcount/ Number of employees – 16,000 employees worldwide.
  • Members (2021) – 774 million users in 200+ countries.
  • Revenue (2020) – $8 billion.

Reid Hoffman is a role model and an inspiration for all entrepreneurs and those who want to do online business.

What does LinkedIn offer?

LinkedIn allows professionals across the globe to converse. You can create and build your network while experts can offer solutions, jobs, and it is the best place to develop or improve your brand’s identity and image.

In simple words, LinkedIn is a gold mine for all users and firms as its huge database allows businesses to reach millions of prospects or candidates across the world.

Below are some surprising stats that will show you how effective the platform is for household users, students, business owners, and others:

  • 94% of B2B advertisers and marketers prefer LinkedIn to promote their products and services.
  • 80% of the business leads generated on social networks come only from LinkedIn.
  • As per consumer reports, users blindly trust the network.
  • For 91% of CEOs, executives, and managers, LinkedIn is the best source to find great content.
  • The platform is free, with premium options. Without spending money, anyone can get a LinkedIn account and use it.

The network has 303 million active users monthly. It also means you have 303 million reasons to create a sales campaign or digital marketing strategy on LinkedIn

So, who’s stopping you from making money from the platform?

LinkedIn’s business model

At that, the idea of creating a dedicated professional social media site was very much unique; hat’s off to Sir Reid Hoffman. People were inclined towards premium offers and additional features because they knew that those things would add significant value to their business, and LinkedIn provided the same to users.

And we know that it is much easier to sell paid or premium features to professionals and businesses than to individuals.

The goal of LinkedIn is the same as other social platforms, to provide users plenty of data and information so that they remain engaged and attached to the platform. To do this, LinkedIn uses the exact same working mechanism as Facebook, Instagram, and Twitter. 

There are many similar features, but the most notable is LinkedIn’s endless news feed like FB, which provides relevant content as per user’s industry, interests, and preferences.

Furthermore, customer experience is at its best on LinkedIn. The platform allows marketers to get in touch with their target users, recruiters and firms can find ideal candidates, and users who want to develop their business network can approach relevant people seamlessly through their content.

If you are among these, keep things relevant and personalized to get the best results.

LinkedIn Premium offers

Currently, LinkedIn has four premium offers. All offers are perfect for all sizes of businesses, from freelancers or bloggers to international companies. Here are LinkedIn premium offers:

LinkedIn Recruiter costs around $ 119.95 monthly, and it is ideal for recruiters as they get a mini CRM to manage their activities.

LinkedIn Business costs around $59.99 monthly. It is suitable to develop your own professional network due to certain features functionalities such as LinkedIn’s InMails.

LinkedIn Sales Navigator costs around $79.99 monthly without commitments. The tool is ideal for lead generation and contains advanced search features.

LinkedIn premium career account costs around $29.99 per month, and it is the best tool for job seekers. The tool helps them to contact the companies and recruiters.

Back in 2020, around 39% of LinkedIn members were paying for LinkedIn Premium Services, as per Kinsta. We are not sure about you but that percentage is massive for any organization or business.

This figure verifies the intelligence and effectiveness of LinkedIn’s business model and sales strategy. Just by facilitating a smooth communication between supply and demand and by using appropriate tools, LinkedIn achieves this massive turnover each year.

But the process does not ends there and LinkedIn makes some extra bucks through advertising and other service that we will discuss below.

LinkedIn Ads: Marketing on the network

With a widespread user base and millions of registered companies from across the globe, LinkedIn is the best advertising network. Not many know that LinkedIn launched digital advertising shortly after its creation back in 2002.

At that time, digital marketing was new and very innovative, and there were no other platforms back in those days, not even Facebook, as it was launched in 2004.

LinkedIn Ads are perfect for both LinkedIn and its users. For LinkedIn, the ads are the major source to generate money, and they help users to boost their online visibility and explore the markets worldwide.

Moreover, LinkedIn is still evolving and has various offers for all types of users.

Some notable LinkedIn features are Ads messages, Texts Ads, and many others:

LinkedIn Ads are effective, and you can drastically increase your websites or online store’s organic traffic. Plus, you can also use LinkedIn ads to develop a brand’s visibility.

To conclude, there are countless reasons to use LinkedIn Ads.

In terms of LinkedIn advertisement prices, they are dependent on various factors, and it varies enormously. The price is set through an auction system and is based on the money that marketers wish to pay to get their advertising. 

The subject is complex, and we will advise you to understand this auction and how it works.

As you can see, LinkedIn makes most of the money by combining its exclusive and premium offers and LinkedIn Ads. The results are awesome, and this money-making machine is unrivaled. In fact, LinkedIn’s 2020 revenue increased by up to 20% than the 2019 revenue.

Remember that LinkedIn was launched 19 years ago, and since then, it is enjoying a constant increase in revenue and users. Both these things indicate a robust technological innovation and the company’s sustainability.

Lastly, you need to understand that income growth of 21% every year is something you won’t find in other well-established companies.

What is LinkedIn’s market value?

LinkedIn also generates money through the stock market. The company traded first time in 2011 in the New York stock market. Then, LinkedIn humbly announced the sale of shares around $ 1 billion to generate quick and extra money.

Just after two years, LinkedIn’s market capitalization surpassed $32 billion. Furthermore, LinkedIn attained more than 47% (192.8 dollars) after accepting Microsoft’s offer of around 26 billion euros in 2016.

Since 2016, Microsoft Corporation is looking after LinkedIn and is no longer independent. And that’s why LinkedIn is not listed on the stock market currently.

LinkedIn Learning & Development

Another source of generating money for LinkedIn is through learning. Till 2017 LinkedIn’s learning and development services were powered by Lynda.com, but now it is a part of Microsoft. It is an e-learning platform that the company acquired back in 2015 for $1.5 billion.

LinkedIn’s learning platform is innovative and one of the top-rated in the world. However, LinkedIn doesn’t target individuals for learning and development instead; it targets only companies and businesses looking to enhance their employee’s skills and knowledge.

However, it is not the primary revenue source, but it is the best learning platform in the world, especially for students.

FAQs

What does LinkedIn offer?

It acts as a facilitator of exchange between supply and demand in various markets. LinkedIn is the best and largest place for sales, career, job search, and for targeted advertising.

When it comes to B2B networks, LinkedIn is the most effective because:

  • It has a massive user base. (Over 300 million active users monthly).
  • It has gained the trust of users, and around 91% of executives and CEOs recommend it.
  • It has the best algorithm that provides personalized and relevant content to users. Plus, businesses can segment or classify their searches to find potentially interested professionals.

Is the business model of LinkedIn effective?

LinkedIn has the best and the most effective business model. That’s why it is the leading professional website in the world. The company is always willing to offer a seamless user experience personalizing exchanges and keeping the site spam-free.

Additionally, there are great premium options that help individuals as well as businesses in a variety of ways. Moreover, it’s hard to beat its targeted advertising offers.

LinkedIn makes money by adopting and creating its business strategy on a win-win model. The user who carefully optimizes his profile only sees relevant posts as per his specific needs.

What are LinkedIn premium offers?

The network is always changing, and LinkedIn earns a major chunk of money by offering its premium services and LinkedIn Ads. Presently, it provides four premium services:

LinkedIn Recruiter: a Mini hub or Recruitment CRM.

The Premium Business account: to enhance your business network’s quality.

LinkedIn Sales Navigator: Best for those looking for fresh leads and promote their brand.

The premium career account: the ideal place for job seekers.

How do LinkedIn Ads work?

LinkedIn generates most of the money through advertisements. LinkedIn Ads include an auction system. Advertisers or marketers with the same target bid for similar advertising space. There are plenty of facilities like Text Ads, sponsored posts, and others.

What is LinkedIn’s current market value?

LinkedIn’s last recorded market value was around $ 195,960 just after Microsoft paid to take over the network in 2016. Since that time, it is regulated under Microsoft Corporation and no longer works independently, and is not publicly traded.

To Conclude: How LinkedIn makes money?

LinkedIn was launched in 2002, and it is two years older than Facebook. For professional uses, LinkedIn is the best social media site. In fact, it is one of the pioneers of a professional network. Presently, it has over 600 million users worldwide.

As per LinkedIn’s trimestral SEC filings, the platform generates money by offering talent solutions services, marketing solutions services, and premium subscriptions.

In simple words, through advertising, recruitment services, and paid memberships.

LinkedIn earns a huge amount because of its diverse business model. It is a facilitator between supply and demand. The platform is free for people but also offers paid and premium features for all types of businesses. 

Lastly, LinkedIn also generates a heft amount by selling advertising services on the network (LinkedIn Ads).