LinkedIn is a free, business and social network which was built on the idea that personal recommendations in today’s global village is was people really need. Hence, they created a way for people to connect on a professional level, and create a circle of acquaintances, or Connections as they are called. Somewhere, in the people you invite to connect with you, there is a connection to another circle and group of people you might know as well or want to connect with. That is called 2nd degree connections, and from here on, it can grow exponentially.
With over 100 million users, from 200 countries around the world, available in many languages, LinkedIn is a force to be reckoned with.
There are a numerous programs that have been added throughout the years, to make LinkedIn more social and more interactive:
- Paid Accounts offers more possibilities and tools to find people.
- LinkedIn Answers allows users to post business related questions that anyone else can view.
- LinkedIn Ads – LinkedIn has a paid service of ads called LinkedIn Ads, where users can create a small ad to be shown on the side of the prominent pages on the site, in a similar way to Google’s Adwords. The ad directs people to the website of the advertiser. The advertiser specifies which LinkedIn members will be able to view the ad by selecting a target audience. The payment for the ads is done in a CPC (Pay per Click) method or CPM (pay per 1,000 impressions). There is a bid and a maximum price that the advertiser is willing to pay for each click is set. LinkedIn is now testing social recommendation based ads; they are trying to target advertising based on the keywords in a profile and conversations.
- LinkedIn Today – In March 2011 LinkedIn added another service called, LinkedIn Today. It is a social news product for business people. The news is aggregated from different established sources like The Wall Street Journal, CNN, NPR, Bloomberg, Huffington Post etc. and is customized to match the industries you and your connections work in. The articles in each industry are organized by how popular the story is and how many times it has been shared on LinkedIn or Twitter.
Most of the success stories with LinkedIn Ads come from job seekers and professional services. B2B is also represented in their ads and businesses claim to have success with creating new connections and receiving orders.
Back in January 2011 LinkedIn filed for an IPO, offering the first glimpse into its finances. In the first 9 month of 2010, LinkedIn turned in a profit of 10.1 million on revenue of $161 million. “We do not expect to be profitable on a GAAP basis in 2011” the company said in its filling.
Four months later, in May 2011, LinkedIn became a public traded company. Its shares went for $45 a pop. That means the company is estimated to be worth $4.3 billion. Reid Hoffman, the co-founder and former CEO of LinkedIn retained 21.7% of the stock which is worth more than $1.6 billion. (Hoffman is one of the founders of Pay-Pal). The shares soared out of the gate to $87.05, and have reached over $100 for a short period before settling in the high 90’s.
Goldman Sachs, an investor, sold all its shares and quadrupled its investment in 3 years.
- CMS Wire: LinkedIn Testing Social Recommendation based ad formats
- Crunchbase: LinkedIn
- LinkedIn: Partner Ads
- Quora: Is the ad targeting on LinkedIn worth paying the CPC?
- Solvater: LinkedIn Direct Ads Advertising Techniques
- Techcrunch: LinkedIn Today is Live
- Wall Street Journal (WSJ): The LinkedIn IPO Millionaires Club