nav
Business Operations Business Models

How Does LinkedIn Make Money (Business and Revenue Model)

The LinkedIn business model

how does LinkedIn make money? | the LinkedIn business model
Here’s what you should know:
  • What is LinkedIn, and how does it work?
  • How does LinkedIn make money?
  • Subscriptions (4 types)
  • Advertising
  • LinkedIn Learning
  • LinkedIn Jobs
  • LinkedIn’s profit and revenue
  • What is the LinkedIn business and revenue model?
  • LinkedIn’s funding and valuation

How does LinkedIn make money if it’s free? Well, here is a full, in-depth, breakdown of their four (4) revenue streams and the different products and services they offer, as well as the LinkedIn business model, their year-over-year revenue, and how LinkedIn works.

What is LinkedIn, and how does it work?

LinkedIn is a professional networking site mainly used for connecting employers and employees who are seeking, talent, work, and/or working relationships.

Since being founded in 2003 by Reid Hoffman, Konstantin Guericke, Allen Blue, Jean-Luc Vaillant, and Eric Ly, LinkedIn has built its way up to $8.05 billion U.S dollars of revenue in 2020 alone.

Some of LinkedIn’s competitors include Twitter, Facebook, Instagram, Pinterest, and other social networking apps.

How does LinkedIn make money?

With LinkedIn’s more than 722 million members, and 260 million of those are monthly active users. How does LinkedIn make money?

Below is a breakdown of how much money LinkedIn makes and its revenue model. Including all revenue streams and how much they make off each service.

Here are the 4 ways of how LinkedIn makes money (in 2021):

LinkedIn has a revenue model that makes money in four (4) ways – subscriptions, advertising, LinkedIn Learning, and LinkedIn Jobs.

#1. Subscriptions (4 types)

LinkedIn offers a free account as well as a paid premium subscription tiers with additional features depending on what your goals are on the platform.

There are 4 types of paid accounts on the LinkedIn platform, LinkedIn Premium (Premium Career and Premium Business), Marketing Solutions, and Talent Solutions. Of those, there are multiple tiers for each depending on whether your account is on behalf of yourself or a business.

LinkedIn paid versions, how much | how does LinkedIn make money?
Source: LinkedIn

LinkedIn Premium:

LinkedIn Premium is split up into two (2) options: Premium Career, and Premium Business.

  • Premium Career: $29.99 per month, or $239.88 per year
  • Premium Business: $59.99 per month, or $575.88 per year

Marketing Solutions:

The other type of account on LinkedIn is Sales Navigator, for users and teams looking to find leads and accounts in your target market.

  • Professional: $79.99 per month, or $779.88 per year
  • Team: $134.99 per month, or $1,240.00 per year (per license)

Talent Solutions:

Talent Solutions is the most expensive of all of the paid versions, costing between $2,399 to $8,999 per year or more. Used for businesses on the LinkedIn platform looking to find and recruit talent to their team.

  • Recruiter Lite: $2,399 per year
  • Recruiter: starts at $8,999 per year

#2. Advertising

LinkedIn generates 2 separate ad revenues through 2 separate ad networks: externally and internally.

They use (1) Xandr, an ad network for brokering consumer-centric digital advertising, and also (2) their own ad network, LinkedIn Ads, that allows companies to post their ads directly through LinkedIn on LinkedIn.

  • Internally: LinkedIn Ads
  • Externally: Xandr

#3. LinkedIn Learning

LinkedIn Learning launched into the e-Learning space in 2015 when LinkedIn acquired Lynda.com for $1.5 billion and rebranded it LinkedIn Learning.

LinkedIn Learning logo how does LinkedIn make money?
Source: Lynda.com

Available for individuals, businesses, higher education, government agencies, and libraries, LinkedIn Learning now has more than 27 million users using the platform.

Along with its 27 million users are 14,000 enterprise customers, of which are 78 of the top Fortune 100 companies. Including companies like Bank of America, Time Warner Cable, Zillow, and Hewlett-Packard.

Pricing:

  • Individual: $29.99 per month, or $239.88 per year
  • Team: get a quote

#4. LinkedIn Jobs

LinkedIn Jobs allows companies to post jobs they are hiring for and users can submit to the posting.

There are currently over 14 million open job listings posted on LinkedIn Jobs, with more than 40 million people using LinkedIn to search for jobs each week and 3 people hired on LinkedIn every minute.

How LinkedIn makes money on this is: whenever a user clicks on the job listing, the company pays per click. The current consensus on this is around $1.20‐$1.50 per click, though it could be more or less depending on job title, industry, and location.

  • Pay to promote job postings: Unknown
  • Pay when people click on job postings: $1.20‐$1.50 per click or more

LinkedIn’s profit and revenue

With those four (4) sources of revenue, subscriptions, advertising, LinkedIn learning, and LinkedIn jobs. How much does that make them in a fiscal year?

Well, in 2020, LinkedIn’s annual revenue amounted to more than $8.05 billion U.S dollars. (see chart below)

how much money does LinkedIn make? | how does LinkedIn make money?
Source: Statista

What is the LinkedIn business and revenue model?

LinkedIn makes money through a few revenue models that they combine within their company, they are:

  • Freemium business model
  • Software as a service (SaaS) business model
  • Advertising based business model

LinkedIn’s funding and valuation

LinkedIn raised $4.7M in its first round of seed funding back in 2003 by Mark Kvamme, Michael Moritz, and Josh Kopelman.

Since then, they have gone on to raise over $150.1M over 6 more rounds.