The estimated revenue per user of LinkedIn is $0.60. Though the active users at Facebook and Twitter are more than the active users of LinkedIn but it has anyhow managed to create a wealth of content that keeps visitors hanging around longer. LinkedIn has myriad sources of revenue. Most of the revenue of LinkedIn comes from companies than individuals. Whereas Social networking sites like Facebook, Twitter rely heavily on “advertising” for revenue, LinkedIn has advertising as one of the source of revenue not the only source of revenue. It can survive easily even when the advertising partners decide to pull all at once. Let us see the channels through which LinkedIn makes money or generates revenue:
1. Talent Solutions
The first channel through which LinkedIn earns money is “Talent Solutions”, LinkedIn has a sub-domain for Talent solution as LinkedIn Business Solution. Here recruiters and companies can pay LinkedIn for premium features to come across the potential candidates. While any LinkedIn user can see jobs for himself, but the recruiter is only visible to companies that pay to use LinkedIn as a candidate sourcing and hiring tool. It is one of the main sources of money for the company. Originally it is known as Hiring Solutions, LinkedIn Talent Solutions has been described as the company’s top operating priority. LinkedIn is investing heavily to provide for recruiters and leverage its connections database. LinkedIn Talent Solutions provides innovative recruiting tools to help one become successful at talent acquisition. The company acquired Bright.com in 2014 which is a firm that matches job descriptions with resumes. It drives over half of LinkedIn’s revenue, $161 million in the last quarter. Talent Solutions contribute more than 65% of the revenue of LinkedIn. The product is primarily for corporate recruiters and the prices are such that only higher companies can afford .Some of the advanced custom services offered embody LinkedIn Corporate Solutions/Recruiter, LinkedIn Referral Engine, LinkedIn Recruitment Media and LinkedIn Career Pages.
LinkedIn makes Money by offering two Plans for Recruiters
a) Recruiter Lite
It embodies mobile access, the full names and profiles of everyone on their network, the ability to send direct messages to anyone on the network, and the ability to track notes, messages and activity history for every prospect.
b) Recruiter Corporate
It embodies full profiles for over 225 million LinkedIn members, the ability to tap into the company’s network with Inside Opinion and company follower search, more tools to share data and work with a team, and custom fields, tags and statuses
2. Marketing Solutions
The second channel of generating money comes from “Marketing Solutions”, where marketers are inspired to succeed in business and in their careers. It is primarily the revenue from the ads which are displayed on the site. This conspicuous channel enables people to build their presence and establish relationships with the renowned professionals .It makes about 23% of the total revenue by showing ads to its users. These ads are well exhibited on most of the pages on the website and embody both IAB standard ads as well as custom text ads. LinkedIn proffers advertising solutions to online marketers who make payment to the company to develop the products in-house and publish the advertisements on Linkedin. It also provides a self-service advertising solution that allows marketers to create and place ads on pages within LinkedIn.
3. Premium Subscriptions
This channel of revenue generation accounts for around 20% of total revenue. LinkedIn proffers its users a four tier membership on the site, which embodies even a free option. The three separate premium plans are:
a) Business(Cost $19.95 per month)
It includes three InMail messages a month, 15 introductions a month, four premium searches and 300 monthly profile searches.
b) Business Plus (Cost $39.95 per month)
It includes 10 InMail messages a month, 25 introductions a month, 4 premium searches and 500 monthly profile searches.
c) Executive (Cost 54.95 per month)
It includes the ability to see full names of 3rd degree and group connections, 25 InMail messages per month, 35 introductions per month, eight premium searches and 700 monthly profile searches.
This channel allows its users to see who has an access to their profiles and also gives them the authority to send messages directly to other users. Using this channel, users can get in touch with people outside their LinkedIn networks. The premium account on LinkedIn also allows users organize their contacts into folders. With the ballooning registered users, the number of premium subscribers too has escalated but if we pay heed to the percentage of overall subscribers who use the premium services, we will come to know that it has declined.