Linked In Had a Very Good Business Model
Linked In essentially bet the store on getting enough professionals to sign up for their service, while leveraging these "free" memberships to companies and recruiters who wanted talent. How's that for smart? It did really pay off for them as they grew and grew.
Here are some data points:
- About 60% of Linked In revenue is from talent solutions services – that is, looking for people to hire by selling services to employers, companies and professional recruiters. Companies pay for enhanced search, access to candidates, branding.
- Also, advertising by companies accounts for a revenue stream of approx. 20%.
- LI leveraged the registration of professionals very well – approximately 80% of these estimated 300 million registrations are still free.
- The paid consumer model was never the driver for LI revenue, It was the corporate/recruiter sell. Advertising has taken off as well.
I worked with HR professionals as a consultant, and they saw this as an answer to their problems if the user base was big enough. And it got big enough blue chip and many other companies worldwide to really hook their wagons to LI and pay for it.