What Is LinkedIn?
LinkedIn proudly calls itself the world’s largest professional network, with more than one billion users, about 19,400 employees worldwide, and a stated goal to “connect the world’s professionals to make them more productive and successful.”
Beginning in 2002 in the living room of co-founder Reid Hoffman, LinkedIn officially launched in 2003. Its headquarters is located in Silicon Valley but it has offices across the globe.
Microsoft (MSFT) acquired LinkedIn Corp. for $26.2 billion in December 2016.
Key Takeaways
- LinkedIn is a global networking site, offering a suite of professional services for job seekers, professionals, recruiters, and employers.
- Most of LinkedIn’s revenue is generated from three of its major services: Talent Solutions, Marketing Solutions, and Premium Subscriptions.
- Since its acquisition, LinkedIn’s financials have been consolidated with Microsoft’s.
- LinkedIn reported 5% year-over-year revenue growth in its fiscal year 2023, surpassing $15 billion in revenue for the first time.
How Does LinkedIn Make Money?
Based on Microsoft’s annual report, for its fiscal year ended June 30, 2023, LinkedIn has become a significant contributor to Microsoft’s bottom line. At about $15.1 billion in revenue, it brought in more money than the search and news advertising division (at $12.2 billion) but a bit less than the gaming division (at $15.4 billion).
LinkedIn also shows steady progress year-over-year. Its revenue rose from $10.2 billion in 2021 to $13.8 billion in 2022.
The professional networking site makes money through its talent solutions, marketing solutions, and premium subscriptions—in other words, by selling services to hiring professionals, by selling advertising, and by selling premium membership tiers.
Although not a primary revenue driver, its learning division, Learning Solutions, is worth noting. This online educational platform offers a range of courses in business, technology, and creative skills.
Talent Solutions
Aimed at recruiters and hiring professionals, Talent Solutions is designed to help recruiters attract, recruit, and hire professionals. A separate division, Learning and Development, offers online courses to enterprise clients and individuals.
Talent Solutions delivered about $7 billion of LinkedIn’s total revenue in 2023.
Marketing Solutions
Marketing Solutions sells targeted advertising and sponsored content opportunities to companies that want to reach LinkedIn users.
A wide variety of formats are available from single-image ads to content sponsorship deals and TV-style streaming video ads.
Premium Subscriptions
LinkedIn’s Premium division markets tiered subscriptions to job seekers and networkers.
Its Premium Career and Premium Business tiers offer advanced search capabilities, enhanced messaging, and profile editing help enhanced with artificial intelligence capabilities.
What Do People Use LinkedIn For?
Having a presence on LinkedIn has become essential for many professionals. It allows them to build up a network of people in their industries. It also gives them visibility to job recruiters and access to their job postings.
About 67 million companies maintain profiles on LinkedIn, for marketing as well as recruiting purposes.
Many independent professionals such as financial advisors list their profiles on LinkedIn for much the same reason as people used to advertise in the Yellow Pages. Potential clients can find them there, review their credentials, and contact them.
Where Does LinkedIn Rank Among Social Media Sites?
LinkedIn ranks fifth in the size of its user base, after Facebook, Instagram, Pinterest, and TikTok.
The demographics of its user base are impressive. They have about twice the buying power of the average online audience. It’s also the second most popular site among high-income Americans. (BeReal, the photo-sharing app, is first.)
What Can I Get for Free on LinkedIn?
You can create and post a profile on LinkedIn for free. You can build a network of friends and colleagues, search job listings, and respond to them. Your resume will be accessible to recruiters and others searching LinkedIn. You’ll have private messaging capabilities from your profile.
When you’re actively looking for a job you might want to sign up for the Premium Career tier, which has enhanced capabilities for job hunters.
The Bottom Line
In recent years, LinkedIn has grown to dominate the crowded field of online job listing services. However, it’s not useful only for job hunting. A profile on LinkedIn has become an essential tool for online visibility for professionals, companies, and schools.