LinkedIn Business Model

LinkedIn is a social platform that was created to connect professionals from different industries in 2003 and became a huge success within a short time of its launch as the community reached 1 million users in August 2004. It enables professionals to connect by creating profiles on the platform and sending requests. The work profile of the users acts as a resume and enables others to view the profile. With this, the professional community can also post jobs to help the right people find the right jobs.Business Model of LinkedIn

In addition to enabling professionals to connect, LinkedIn also enables recruiters and companies to connect with potential employees. It also charges professionals as well as companies to host jobs and have a presence on the platform.

Business Model of LinkedIn

The business model of LinkedIn is different from other social networking platforms. It is based on business solutions and premium subscriptions. With its business solutions, LinkedIn enables companies and professionals to meet their business needs. The business solutions of LinkedIn focus on finding networking opportunities, new employees as well as learning new business concepts. The talent solutions of LinkedIn form a major part of the business solutions and happen to be the most important services and tools made available in the LinkedIn business model. These services include recruiting tools that help companies, as well as employees, find the best employees or partners for their businesses. The other important aspect of business solutions is marketing solutions. Marketing solutions help marketers to develop marketing campaigns and run them well. LinkedIn helps companies to create successful marketing campaigns with the help of sponsored content, text advertisements, and sponsored InMails.

Premium subscriptions refer to the solutions that cater to the individual needs of those who have a presence on LinkedIn. Using premium subscriptions, users can avail services that are not otherwise available to other users. These subscriptions include career, business page, sales navigator, and recruiter lite.

Elements of Business Model of LinkedIn

The different elements of the business model of LinkedIn include:

  • Customer segments: LinkedIn is a multi-sided platform and caters to users, employers, and advertisers. In other words, LinkedIn offers services that cater to meet the needs of different types of customers.
  • Value proposition: For every user, LinkedIn creates different value propositions. For instance, for users, LinkedIn acts as a platform where they can showcase their talent and skills to recruiters and other professionals.
  • Customer relationships: As a social platform, customer relationship is one of the major elements of the business model of LinkedIn. LinkedIn believes that it needs to maintain good customer relationships to onboard more users.
  • Distribution channels: The distribution channels of the LinkedIn business model include the website and mobile app.
  • Key activities: The key activities of LinkedIn include developing and updating the online platform. Additionally, the other activities include retaining and growing the number of users and also protecting the information and privacy of users’ information.
  • Key resources: The key resource of the LinkedIn business model is the platform itself.
  • Key partners: The platform has several partners that include data centers, universities, learning course developers, and companies that make use of the LinkedIn platform.
  • Cost structure: The cost structure LinkedIn is associated with the development, growth, and maintenance of the platform.

LinkedIn Business Model Graph

Revenue of LinkedIn

With the help of its business model, LinkedIn has been able to earn steady revenue in the past years. In 2019, the revenue generated by LinkedIn was almost $6.8 billion. Of this revenue, talent solutions contribute almost 65% and premium solutions contribute around 17% to the revenue. Further, LinkedIn has seen steady growth over the past several years and has also been able to acquire renowned names for its expansion.

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