LinkedIn

Linkedin
Type of business Subsidiary
Type of site
 Social network service
Available in Multilingual (24)
Founded December 28, 2002 (2002-12-28)
Mountain View, California, U.S.
Headquarters Sunnyvale, California, U.S.
Area served Worldwide
Founder(s) Reid Hoffman
Allen Blue
Konstantin Guericke
Eric Ly
Jean-Luc Vaillant
Key people Reid Hoffman (Chairman)
Jeff Weiner (CEO)
Industry Internet
Revenue Increase US$3 billion (2015)[1]
Net income Decrease US$−166 million (2015)[1]
Employees 9,732 (March 2016)[2]
Parent Microsoft Corporation
Subsidiaries SlideShare
Slogan(s) Relationships Matter[3]
Website www.linkedin.com
Alexa rank Decrease 25 (July 2017)[4]
Advertising Google, AdSense
Registration Required
Users 500 million members (April 2017)[5]
Launched May 5, 2003 (2003-05-05)
Current status Active

LinkedIn (/ˌliŋkt.ˈɪn/) is a business- and employment-oriented social networking service that operates via websites and mobile apps. Founded on December 28, 2002,[6] and launched on May 5, 2003,[7] it is mainly used for professional networking, including employers posting jobs and job seekers posting their CVs. As of 2015, most of the company's revenue came from selling access to information about its members to recruiters and sales professionals.[8] As of September 2016, LinkedIn had more than 467 million accounts, out of which more than 106 million are active.[5] As of April 2017, LinkedIn had 500 million members in 200 countries.[9] LinkedIn allows members (both workers and employers) to create profiles and "connections" to each other in an online social network which may represent real-world professional relationships. Members can invite anyone (whether an existing member or not) to become a connection.[10] The "gated-access approach" (where contact with any professional requires either an existing relationship or an introduction through a contact of theirs) is intended to build trust among the service's members. LinkedIn participated in the EU's International Safe Harbor Privacy Principles.

The site has an Alexa Internet ranking as the 20th most popular website (October 2016).[4] According to the New York Times, US high school students are now creating LinkedIn profiles to include with their college applications. [11] Based in the United States, the site is, as of 2013, available in 24 languages,[12] including Arabic, Chinese, English, French, German, Italian, Portuguese, Spanish, Dutch, Swedish, Danish, Romanian, Russian, Turkish, Japanese, Czech, Polish, Korean, Indonesian, Malay, and Tagalog.[13][14] LinkedIn filed for an initial public offering in January 2011 and traded its first shares on May 19, 2011, under the NYSE symbol "LNKD".[15]

On June 13, 2016, Microsoft announced plans to acquire LinkedIn for $26.2 billion.[16][17] The acquisition was completed on December 8, 2016.[18] The transaction resulted in the payment of approximately $26.4 billion in cash merger consideration.[19]

Company overview

Former LinkedIn headquarters on Stierlin Court in Mountain View, CA

LinkedIn is headquartered in Sunnyvale, California, with offices in Omaha, Chicago, Los Angeles, New York, San Francisco, Washington, Sao Paulo, London, Dublin, Amsterdam, Milan, Paris, Munich, Madrid, Stockholm, Singapore, Hong Kong, China, Japan, Australia, Canada, India and Dubai. In January 2016, the company had around 9,200 employees.[2]

LinkedIn's CEO is Jeff Weiner,[12] previously a Yahoo! Inc. executive. Founder Reid Hoffman, previously CEO of LinkedIn, is Chairman of the Board.[12][20] It is funded by Sequoia Capital, Greylock, Bain Capital Ventures,[21] Bessemer Venture Partners and the European Founders Fund.[22] LinkedIn reached profitability in March 2006.[23] Through January 2011, the company had received a total of $103 million of investment.[24]

History

Founding to 2010

The company was founded in December 2002 by Reid Hoffman and founding team members from PayPal and Socialnet.com (Allen Blue, Eric Ly, Jean-Luc Vaillant, Lee Hower, Konstantin Guericke, Stephen Beitzel, David Eves, Ian McNish, Yan Pujante, Chris Saccheri).[25] In late 2003, Sequoia Capital led the Series A investment in the company.[26] In August 2004, LinkedIn reached 1 million users.[27] In March 2006, LinkedIn achieved its first month of profitability.[27] In April 2007, LinkedIn reached 10 million users.[27] In February 2008, LinkedIn launched a mobile version of the site.[28]

In June 2008, Sequoia Capital, Greylock Partners, and other venture capital firms purchased a 5% stake in the company for $53 million, giving the company a post-money valuation of approximately $1 billion.[29] In 2010, LinkedIn opened an International Headquarters in Dublin, Ireland,[30] received a $20 million investment from Tiger Global Management LLC at a valuation of approximately $2 billion,[31] announced its first acquisition, Mspoke,[32] and improved its 1% premium subscription ratio.[33] In October of that year, Silicon Valley Insider ranked the company No. 10 on its Top 100 List of most valuable start ups.[34] By December, the company was valued at $1.575 billion in private markets.[35]

2011 to present

LinkedIn office building at 222 Second Street in San Francisco (opened in March 2016)
LinkedIn Office in Toronto.

LinkedIn filed for an initial public offering in January 2011. The company traded its first shares on May 19, 2011, under the NYSE symbol "LNKD", at $45 per share. Shares of LinkedIn rose as much as 171% on their first day of trade on the New York Stock Exchange and closed at $94.25, more than 109% above IPO price. Shortly after the IPO, the site's underlying infrastructure was revised to allow accelerated revision-release cycles.[12] In 2011, LinkedIn earned $154.6 million in advertising revenue alone, surpassing Twitter, which earned $139.5 million.[36] LinkedIn's fourth-quarter 2011 earnings soared because of the company's increase in success in the social media world.[37] By this point, LinkedIn had about 2,100 full-time employees compared to the 500 that it had in 2010.[38]

In Q2 2012, LinkedIn leased 57,120 square feet on three floors of the One Montgomery Tower building in the Financial District of San Francisco, which was expanded to 135,000 square feet by 2014.[39][40] In May 2012, LinkedIn announced that its Q1 2012 revenues were up to $188.5 million compared to $93.9 million in Q1 2011. Net income increased 140% over Q1 2011 to $5 million. Revenue for Q2 was estimated to be between $210 to $215 million.[41] In November 2012, LinkedIn released its third quarter earnings, reporting earnings-per-share of $0.22 on revenue of $252 million. As a result of these numbers, LinkedIn's stock increased to roughly $112 a share.[42]

In April 2014, LinkedIn announced that it had leased 222 Second Street, a 26-story building under construction in San Francisco's SoMa district, to accommodate up to 2,500 of its employees,[40] with the lease covering 10 years.[2] The goal was to join all San Francisco-based staff (1,250 as of January 2016) in one building, bringing sales and marketing employees together with the research and development team.[2] They started to move in in March 2016.[2] In February 2016, following an earnings report, LinkedIn's shares dropped 43.6% within a single day, down to $108.38 per share. LinkedIn lost $10 billion of its market capitalization that day.[43][44] On June 13, 2016, Microsoft announced that it would acquire LinkedIn for $196 a share, a total value of $26.2 billion and the largest acquisition made by Microsoft to date. The acquisition would be an all-cash, debt-financed transaction. Microsoft would allow LinkedIn to "retain its distinct brand, culture and independence", with Weiner to remain as CEO, who would then report to Microsoft CEO Satya Nadella. Analysts believed Microsoft saw the opportunity to integrate LinkedIn with its Office product suite to help better integrate the professional network system with its products. The deal was completed on December 8, 2016.[17]

In late 2016, LinkedIn announced a planned increase of 200 new positions in its Dublin office, which would bring the total employee count to 1,200.[45]

Acquisitions

In July 2012, LinkedIn acquired 15 key Digg patents for $4 million including a "click a button to vote up a story" patent.[46]

Number Acquisition date Company Business Country Price Description Ref.
1 August 4, 2010 mspoke Adaptive personalization of content  USA $0.6 million[47] LinkedIn Recommendations [48]
2 September 23, 2010 ChoiceVendor Social B2B Reviews  USA $3.9 million[49] Rate and review B2B service providers [50]
3 January 26, 2011 CardMunch Social Contacts  USA $1.7 million[47] Scan and import business cards [51]
4 October 5, 2011 Connected Social CRM  USA - LinkedIn Connected [52]
5 October 11, 2011 IndexTank Social search  USA - LinkedIn Search [53]
6 February 22, 2012 Rapportive Social Contacts  USA $15 million[54] - [55]
7 May 3, 2012 SlideShare Social Content  USA $119 million Give LinkedIn members a way to discover people through content [56]
8 April 11, 2013 Pulse Web / Mobile newsreader  USA $90 million Definitive professional publishing platform [57]
9 February 6, 2014 Bright.com Job Matching  USA $120 million [58]
10 July 14, 2014 Newsle Web application  USA - Allows users to follow real news about their Facebook friends, LinkedIn contacts, and public figures. [59]
11 July 22, 2014 Bizo Web application  USA $175 million Helps advertisers reach businesses and professionals [60]
12 March 16, 2015 Careerify Web application  Canada - Helps businesses hire people using social media [61]
13 April 2, 2015 Refresh.io Web application  USA - Surfaces insights about people in your networks right before you meet them [62]
14 April 9, 2015 Lynda.com eLearning  USA $1.5 billion[63] Lets users learn business, technology, software, and creative skills through videos [64]
15 August 28, 2015 Fliptop Predictive Sales and Marketing Firm  USA - Using data science to help companies close more sales [65]
16 February 4, 2016 Connectifier Web application  USA - Helps companies with their recruiting [66]
17 July 26, 2016 PointDrive Web application  USA - Lets salespeople share visual content with prospective clients to help seal the deal [67]

Lawsuit

In 2013, a class action lawsuit entitled Perkins vs. LinkedIn Corp was filed against the company, accusing it of automatically sending invitations to contacts in a member's email address book without permission. The court agreed with LinkedIn that permission had in fact been given for invitations to be sent, but not for the two further reminder emails.[68] LinkedIn settled the lawsuit in 2015 for $13 million.[69] Many members should have received a notice in their email with the subject line "Legal Notice of Settlement of Class Action". The Case No. is 13-CV-04303-LHK .[70]

Membership

Social media websites can also use "traditional" marketing approaches, as seen in these LinkedIn-branded chocolates.

As of 2015, LinkedIn had more than 400 million members in over 200 countries and territories.[12][71] It is significantly ahead of its competitors Viadeo (50 million as of 2013)[72] and XING (11 million as of 2016).[73] In 2011, its membership grew by approximately two new members every second.[74]

User profile network

The basic functionality of LinkedIn allows users (workers and employers) to create profiles, which for employees typically consist of a curriculum vitae describing their work experience, education and training, skills, and a personal photo. The site also enables members to make "connections" to each other in an online social network which may represent real-world professional relationships. Members can invite anyone (whether a site member or not) to become a connection. However, if the invitee selects "I don't know" or "Spam", this counts against the inviter. If the inviter gets too many of such responses, the member's account may be restricted or closed.[10]

A member's list of connections can then be used in a number of ways:

The "gated-access approach" (where contact with any professional requires either an existing relationship, or the intervention of a contact of theirs) is intended to build trust among the service's users. LinkedIn participated in the EU's International Safe Harbor Privacy Principles.

Security and technology

In June 2012, cryptographic hashes of approximately 6.4 million LinkedIn user passwords were stolen by hackers who then published the stolen hashes online.[76] This action is known as the 2012 LinkedIn hack. In response to the incident, LinkedIn asked its users to change their passwords. Security experts criticized LinkedIn for not salting their password file and for using a single iteration of SHA-1.[77] On May 31, 2013 LinkedIn added two-factor authentication, an important security enhancement for preventing hackers from gaining access to accounts.[78] In May 2016, 117 million LinkedIn usernames and passwords were offered for sale online for the equivalent of $2,200.[79] These account details are believed to be sourced from the original 2012 LinkedIn hack, in which the number of user IDs stolen had been underestimated. To handle the large volume of emails sent to its users every day with notifications for messages, profile views, important happenings in their network, and other things, LinkedIn uses the Momentum email platform from Message Systems.[80]

Applications

LinkedIn 'applications' often refers to external third party applications that interact with LinkedIn's developer API. However, in some cases it could refer to sanctioned applications featured on a user's profile page.

External, third party applications

On February 12, 2015 LinkedIn released an updated terms of use for their developer API.[81] The developer API allows both companies and individuals the ability to interact with LinkedIn's data through creation of managed third party applications. Applications must go through a review process and request permission from the user before accessing a user's data.

Normal use of the API is outlined in LinkedIn's developer documents, including:

On a more rare occasion, applications have been developed by third parties to extend LinkedIn's native functions. For instance, LinkedIn does not allow users to define images that correlate with articles or links they share, but this can be done using a third party application like LinkedIn Advanced Share.

Embedded in profile

In October 2008, LinkedIn enabled an "applications platform" which allows external online services to be embedded within a member's profile page. Among the initial applications were an Amazon Reading List that allows LinkedIn members to display books they are reading, a connection to Tripit, and a Six Apart, WordPress and TypePad application that allows members to display their latest blog postings within their LinkedIn profile.[82] In November 2010, LinkedIn allowed businesses to list products and services on company profile pages; it also permitted LinkedIn members to "recommend" products and services and write reviews.[83] Shortly after, some of the external services were no longer supported, including Amazon's Reading List [84]

Mobile

A mobile version of the site was launched in February 2008, which gives access to a reduced feature set over a mobile phone. The mobile service is available in six languages: Chinese, English, French, German, Japanese and Spanish.[85] In January 2011, LinkedIn acquired CardMunch, a mobile app maker that scans business cards and converts into contacts.[86] In June 2013, CardMunch was noted as an available LinkedIn app.[12] In August 2011, LinkedIn revamped its mobile applications on the iPhone, Android and HTML5. At the time, mobile page views of the application were increasing roughly 400% year over year according to CEO Jeff Weiner.[87] In October 2013, LinkedIn announced a service for iPhone users called "Intro", which inserts a thumbnail of a person's LinkedIn profile in correspondence with that person when reading mail messages in the native iOS Mail program.[88] This is accomplished by re-routing all emails from and to the iPhone through LinkedIn servers, which security firm Bishop Fox asserts has serious privacy implications, violates many organizations' security policies, and resembles a man-in-the-middle attack.[89][90]

Groups

LinkedIn also supports the formation of interest groups, and as of March 29, 2012 there are 1,248,019 such groups whose membership varies from 1 to 744,662.[91][92] The majority of the largest groups are employment related, although a very wide range of topics are covered mainly around professional and career issues, and there are currently 128,000 groups for both academic and corporate alumni. Groups support a limited form of discussion area, moderated by the group owners and managers.[93] Since groups offer the functionality to reach a wide audience without so easily falling foul of anti-spam solutions, there is a constant stream of spam postings, and there now exist a range of firms who offer a spamming service for this very purpose. LinkedIn has devised a few mechanisms to reduce the volume of spam,[94] but recently took the decision to remove the ability of group owners to inspect the email address of new members in order to determine if they were spammers. Groups also keep their members informed through emails with updates to the group, including most talked about discussions within your professional circles.[91][95] Groups may be private, accessible to members only or may be open to Internet users in general to read, though they must join in order to post messages.

In December 2011, LinkedIn announced that they are rolling out polls to groups.[96] In November 2013, LinkedIn announced the addition of Showcase Pages to the platform.[97] In 2014, LinkedIn announced they were going to be removing Product and Services Pages[98] paving the way for a greater focus on Showcase Pages.[99]

Job listings

LinkedIn allows users to research companies, non-profit organizations, and governments they may be interested in working for. Typing the name of a company or organization in the search box causes pop-up data about the company or organization to appear. Such data may include the ratio of female to male employees, the percentage of the most common titles/positions held within the company, the location of the company's headquarters and offices, and a list of present and former employees. In July 2011, LinkedIn launched a new feature allowing companies to include an "Apply with LinkedIn" button on job listing pages.[100] The new plugin allowed potential employees to apply for positions using their LinkedIn profiles as resumes.[100]

Online recruiting

Job recruiters, head hunters, and personnel HR are increasingly using LinkedIn as a source for finding potential candidates. By using the Advanced search tools, recruiters can find members matching their specific key words with a click of a button. They then can make contact with those members by sending a request to connect or by sending InMail about a specific job opportunity he or she may have. Recruiters also often join industry based groups on LinkedIn to create connections with professionals in that line of business.[101]

Skills

Since September 2012, LinkedIn has enabled users to "endorse" each other's skills. This feature also allows users to efficiently provide commentary on other users' profiles – network building is reinforced. However, there is no way of flagging anything other than positive content.[102] LinkedIn solicits endorsements using algorithms that generate skills members might have. Members cannot opt out of such solicitations, with the result that it sometimes appears that a member is soliciting an endorsement for a non-existent skill.[103]

Publishing platform

LinkedIn continues to add different services to its platform to expand the ways that people use it. On May 7, 2015, LinkedIn added an analytics tool to its publishing platform. The tool allows authors to better track traffic that their posts receive.[104]

Influencers

The LinkedIn Influencers program launched in October 2012 and features global thought leaders who share their professional insights with LinkedIn's members. As of May 2016, there are 750+ Influencers, approximately 74% of which are male.[105] The program is invite-only and features leaders from a range of industries including Richard Branson, Narendra Modi, Arianna Huffington, Greg McKeown, Rahm Emanuel, Jamie Dimon, Martha Stewart, Deepak Chopra, Jack Welch, and Bill Gates.[106][107]

Advertising and for-pay research

In mid-2008, LinkedIn launched LinkedIn DirectAds as a form of sponsored advertising.[108] In October 2008, LinkedIn revealed plans to open its social network of 30 million professionals globally as a potential sample for business-to-business research. It is testing a potential social network revenue model - research that to some appears more promising than advertising.[109] On July 23, 2013, LinkedIn announced their Sponsored Updates ad service. Individuals and companies can now pay a fee to have LinkedIn sponsor their content and spread it to their user base. This is a common way for social media sites such as LinkedIn to generate revenue.[110]

Future plans

Economic graph

Inspired by Facebook's "social graph", LinkedIn CEO Jeff Weiner set a goal in 2012 to create an "economic graph" within a decade.[111] The goal is to create a comprehensive digital map of the world economy and the connections within it.[112] The economic graph was to be built on the company's current platform with data nodes including companies, jobs, skills, volunteer opportunities, educational institutions, and content.[113][114][115] They have been hoping to include all the job listings in the world, all the skills required to get those jobs, all the professionals who could fill them, and all the companies (nonprofit and for-profit) at which they work.[113] The ultimate goal is to make the world economy and job market more efficient through increased transparency.[111] In June 2014, the company announced its "Galene" search architecture to give users access to the economic graph's data with more thorough filtering of data, via user searches like "Engineers with Hadoop experience in Brazil."[116][117]

LinkedIn has used economic graph data to research several topics on the job market, including popular destination cities of recent college graduates,[118] areas with high concentrations of technology skills,[119] and common career transitions.[120] LinkedIn provided the City of New York with data from economic graph showing "in-demand" tech skills for the city's "Tech Talent Pipeline" project.[121]

New user interface in 2017

Soon after LinkedIn's acquisition by Microsoft, on January 19, 2017, LinkedIn's new desktop version was introduced.[122] The new version was meant to make the user experience seamless across mobile and desktop. Some of the changes were made according to the feedback received from the previously launched mobile app. Features that were not heavily used were removed. For example, the contact tagging and filtering features are not supported any more.[123]

Users' reaction

Following the launch of the new interface, some users, including blogger Zubair Abbas, complained about missing features which were there in the older version, slowness and bugs in the UI.[124] The issues were faced by both free and premium users, and with both the desktop version and the mobile version of the site.

Dropped features in 2013

In January 2013, LinkedIn dropped support for LinkedIn Answers, and cited a new 'focus on development of new and more engaging ways to share and discuss professional topics across LinkedIn' as the reason for the retirement of the feature. The feature had been launched in 2007, and allowed users to post question to their network and allowed users to rank answers.[125]

Business units

LinkedIn derives its revenues from four business divisions:[126]

Some elements of the various subscription services are also on a pay per use basis like InMail.

Reception

LinkedIn has been described by online trade publication TechRepublic as having "become the de facto tool for professional networking".[127] LinkedIn has also been praised for its usefulness in fostering business relationships.[128] "LinkedIn is, far and away, the most advantageous social networking tool available to job seekers and business professionals today," according to Forbes.[129] LinkedIn has also received criticism, primarily regarding e-mail address mining and auto-update.

International restrictions

In 2009, Syrian users reported that LinkedIn server stopped accepting connections originating from IP addresses assigned to Syria. The company's customer support stated that services provided by them are subject to US export and re-export control laws and regulations and "As such, and as a matter of corporate policy, we do not allow member accounts or access to our site from Cuba, Iran, North Korea, Sudan, or Syria."[139]

In February 2011, it was reported that LinkedIn was being blocked in China after calls for a "Jasmine Revolution". It was speculated to have been blocked because it is an easy way for dissidents to access Twitter, which had been blocked previously.[140] After a day of being blocked, LinkedIn access was restored in China.[141]

In February 2014, LinkedIn launched its Simplified Chinese language version named "领英" (pinyin: Lǐngyīng; literally: "leading elite"), officially extending their service in China.[142][143] LinkedIn CEO Jeff Weiner acknowledged in a blog post that they would have to censor some of the content that users post on its website in order to comply with Chinese rules, but he also said the benefits of providing its online service to people in China outweighed those concerns.[142][144]

On 4 August 2016, a Moscow court ruled that LinkedIn must be blocked in Russia for violating a new data retention law, which requires the user data of Russian citizens to be stored on servers within the country. This ban was upheld on 10 November 2016, and all Russian ISPs began blocking LinkedIn thereafter. LinkedIn's mobile app was also banned from Google Play Store and iOS App Store in Russia in January 2017.[145][146]

SNA LinkedIn

The Search, Network, and Analytics (SNA) team at LinkedIn has a website[147] that hosts the open source projects built by the group. Notable among these projects is Project Voldemort,[148] a distributed key-value structured storage system with low-latency similar in purpose to Amazon.com's Dynamo and Google's BigTable.

Surveillance and NSA program

In the 2013 global surveillance disclosures, documents released by Edward Snowden revealed that British Government Communications Headquarters (GCHQ) (an intelligence and security organisation) infiltrated the Belgian telecommunications network Belgacom by luring employees to a false LinkedIn page.[149]

See also

References

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