LinkedIn Business Model | Business Model Navigator

Overview:

LinkedIn is a business and employment-oriented service that operates via websites and mobile apps. Founded on December 28, 2002, and launched on May 5, 2003, 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. As of April 2017, LinkedIn had 500 million members in 200 countries, out of which more than 106 million members are active. 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. 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.

Industries:

Information Technology

Services

Similar firms (based on pattern co-occurrence):

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4 shared patterns

5 shared patterns

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3 shared patterns

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Business Model Patterns:

Digitization

How they do it: LinkedIn brought the possibility to network and search for relevant industry contacts to the internet. Through the LinkedIn network, users can communicate with potential business partners and identify new leads for collaborations, sales and recruiting. This allows reaching-out beyond your immediate physical reach or relying on trade fairs to meet potential new business partners.

Flat Rate

How they do it: LinkedIn limits the use for regular users. They still have access to a wide range of functions but are limited in certain factors. E.g. the possibility to search other profiles is capped for free users. Premium users who pay an annual or monthly fee however can search for other profiles without limit.

Freemium

How they do it: Regular use of the LinkedIn platform is free and users can use the majority of the functions. However, LinkedIn offers various premium subscriptions allowing users to unlock even more functions or more intense use (e.g. unlimited profile searches).

Hidden Revenue

How they do it: Although regular users can use the platform for free, LinkedIn integrates targeted ads for services as well as jobs in the individual users platform experience. Hence it is able to generate revenue from both free as well as premium users.

Leverage Customer Data

How they do it: LinkedIn uses customer data for several purposes. One purpose is to better target its advertisements for services. In addition it gives advanced access to search or filter the data on the platform for users with a premium subscription. This supports e.g. finding the right candidates for a job opening. Another purpose is to give users with a premium subscription more insights on how their own profile compares to similar profiles and who visits their profile.

Lock-in

How they do it: LinkedIn has several mechanisms in place to keep the communication and exchange between users on their platform. One example is that it is not possible to send email adresses in initial contact requests for free users. In addition, the platform’s value to the individual user grows with its network, increasing the barrier to switch to another network.

Peer-to-peer

How they do it: LinkedIn administrates and maintains the platform which allows individual users and businesses to connect to each other. Their service is to provide the infrastructure, which in return gives them the access and right to analyze and use the data for marketing and other purposes.

Subscription

How they do it: Although general use of LinkedIn is provided for free, the company offers several subscription options which give a user more functionality. These are e.g. targeted on generating sales prospects or recruiting. Subscriptions are typically annually or monthly.

Two-sided Market

How they do it: Especially the hiring functions in LinkedIn function as a two-sided market. The value for both recruiters and candidates increase with the amount of jobs and candidates on the platform.

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