This initial post gives a brief insight into LinkedIn introducing you to the personalities behind its success and will help you to gain, in ‘layman’s’ terms, an understanding of how the site earns its revenue.
LinkedIn is not only one of the most professionally well respected social media companies, but one which – after being practically ignored for years – has transformed itself into the most prestigious site of all, with its success undoubtedly meaning that it is now likely to become a business model for future social media platforms.
In terms of UK presence on LinkedIn, there are now over 4 million users, with its European headquarters based in Dublin. And the site’s purpose? To connect the World’s professionals and make them more productive and successful!
LinkedIn personalities come with some pretty impressive pedigrees. The company was co-founded in California in 2003 by Reid Hoffman – now its Executive Chairman – and his team members from PayPal and Socialnet.com, with the company first making a profit in 2006. Educated at Stanford and Oxford, Reid is one of the most respected players in the fast-growing social networking market, and also one the most successful and high profile serial technology investors in the world.
Reid is very ably assisted by CEO Jeff Weiner, former Executive Vice President of Yahoo!’s Network Division.
Jeff joined the company in December 2008, and has increased its membership base from 33 million to over 175 million members, its revenue by over six-fold, and has rapidly expanded its global platform to include 17 languages and operate in 25 offices around the world.
‘Although LinkedIn’s membership is a fraction of Facebook’s nearly 1 billion users, its emphasis on professional networking — instead of dating, games and personal interests — sets it apart from many of its competitors. LinkedIn’s laser-like focus on business makes it “unique” in that regard.’
Since Jeff joined the company he has developed more reasons for users to visit LinkedIn stating that a redesign of LinkedIn’s home page has helped increase user engagement, and he promises ‘a wave of improvements … and other pillar products later this year.’ His innovations mean users can now get the latest news updates, or chat with peers in industry-specific member groups. This keeps users focused and encourages them to regularly up-date their content, which increases the value of LinkedIn’s database to corporate customers, particularly recruiters looking for job candidates.
LinkedIn’s biggest revenue source is its ‘Hiring Solutions’ division, which helps corporate organisations find the right people to recruit. With over 2 million companies on its database, LinkedIn is a great source of information for recruiters with companies paying as much as $8,200 a year for each LinkedIn user licence known as a “seat”.
To give you an idea of LinkedIn’s success in the money market, during the second quarter of 2012, the Hiring Solutions division’s revenue grew 107%, to $122 million, and LinkedIn also made $63 million — around one third of its revenue — from display ads and other “marketing solutions.”
In the same quarter, more than 15% of new member registrations were on mobile, up from 10% in the previous quarter with Jeff Weiner stating the social network’s mobile segment ‘continues to be our fastest-growing service.’
There is absolutely no doubt that technology and platforms such as LinkedIn have changed the game for today’s job seekers and company recruiters alike. Applicant tracking and recruiting software experts Jobvite’s (jobvite.com) latest survey says it all.
- 92% of over 1,000 recruiters surveyed use or plan to use social recruiting (83% in 2010)
- 93% of recruiters use LinkedIn actively and it was the most popular site with Facebook at 66% and Twitter 54%
- 43% of recruiters who use social recruiting saw an increase in candidate quality
- 73% have successfully hired a candidate through social media
- 31% of recruiters using social media have seen a sustained increase in employee referrals
I recruited my assistant via a free update posted on my LinkedIn account – not good news for local newspapers currently loosing valuable revenue they cannot afford because of the prolific use of social media for this purpose.
But whether or not you are searching for a job, LinkedIn remains a brilliant database for meeting and connecting with fellow professionals; future blogs will offer you tips for success!