Why does LinkedIn want to be a media company? It’s all about the data

/// Why does LinkedIn want to be a media company? It’s all about the data

July 5, 2013  |  Blog

In the past few weeks, I’ve found myself clicking on the headlines of business stories and expecting to head to a traditional media outlet’s website, only to find myself landing somewhere fairly new and unexpected: to the career-oriented pages of LinkedIn.

We’ve written a great deal about LinkedIn over the past few years: How it’s become a engineering powerhouse built around data, how more than half of its revenue comes from its corporate recruiting product, and how it’s building algorithims to get you considering jobs that you never knew you wanted.

So in a sense, it seems like an odd fit that in the past few months, we’ve been writing more about LinkedIn becoming a media company. Between the acqusition of the new reader Pulse, the growth of LinkedIn Today (the company’s news feed on its homepage), and the launch of LinkedIn Influencers (the blogging platform for select users), there’s no doubt that it’s emerged as a serious place to go for your business news.

For a company that didn’t start out in the media business, it’s a funny direction to take. But with more than half of its business coming from the corporate recruiting product it sells to companies, a growing media business brings eyeballs and attention to the site, which in turn fuels data to the recruting side.

“We want to be the place you go in the morning to get the news and insight before you start your day, or the place you check in when you’re betweeen meetings,” said Ryan Roslansky, who is the head of content products for LinkedIn. And LinkedIn is making progress in that direction.

LinkedIn Today, which provides you with a stream of news updates, has been around since 2011. But LinkedIn has only had Influencers, the select group of bloggers including Bill Gates and Richard Branson, writing for the site since October (a feature it launched in just six weeks, as they explained at our Structure conference). A company spokesperson said the blog posts have helped drive an eight-fold increase in traffic on LinkedIn Today over the past year, and each posts get, on average, more than 100 comments, and some of the top posts garner more than 100,000 pageviews.

It’s worth asking, why exactly does LinkedIn want to become a media company? As we’ve written here at paidContent repeatedly, the state of online advertising is not a thriving business right now. While different companies are experimenting with things like targeted or sponsored advertising to support content, it’s still an uncertain future for digital publishers. AdAge wrote recently that LinkedIn is pitching companies on “sponsored updates,” or native advertising in its feed, as part of its growing media presence.

But still, revenue from advertising only made up 23 percent of LinkedIn’s total revevenue in the first quarter — the other 77 percent comes from subscriptions to LinkedIn’s premium product (20 percent of overall revenue), and Talent Solutions, the corporate recruiting products that companies purchase (a whopping 57 percent of total revenue.)

So even if LinkedIn is successful at introducing sponsored content within the news feed, it’s clear that Talent Solutions is the biggest money-maker for the company. The section brought in $184.3 million last quarter, an increase of 80 percent compared to the first quarter of 2012. And the key to Talent Solutions is generating data on the site.

As I’ve written previously, the company takes the information that consumers upload to their digital resumes and uses it to provide companies with suggestions and tools for hiring. These tools include allowing corporate recruiters and human resources employeees to post job ads, search for relevant candidates, track responses, and monitor candidates they’d want to hire.

But with only 225 million registered users on Linkedin, the company needs to bring more attention to the site if consumers are going to keep fueling the data needed for recruiting. That user base is small compared to Facebook’s 1.11 billion monthly active users or Twitter’s 200 million monthly active users. And the company understands that professional business news that people can read at work or on their phones is a great way to do that — certainly much better than spamming them with endorsements from mothers-in-law.

“Content is a frequent use case. Members do check professional content to stay abreast of what’s going on in their industry,” Roslansky told me. “People come back to LinkedIn for the value proposition we offer, and the more frequently they come back, the more likely they are to subscribe to one or our premium services, or the more likely they are to update their profile.”

Link: Why does LinkedIn want to be a media company? It’s all about the data

paidContent – Eliza Kern

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