LinkedIn’s healthy user engagement converts to revenue growth
A couple of years ago, Microsoft (MSFT) acquired LinkedIn for a valuation of $27 billion, its biggest acquisition to date. During the past two years, Microsoft has managed to grow LinkedIn very quickly. In the latest quarter, the number of sessions on LinkedIn—a key metric used to measure user engagement—increased 34% YoY (year-over-year). LinkedIn’s revenue also rose proportionally at a rate of 33% YoY in the quarter.
LinkedIn’s main business segments include Talent Solutions, Premium Subscriptions, and Marketing Solutions. The company has been growing its revenue at a healthy rate of over 30% for the last few quarters. Microsoft has transformed LinkedIn, as its growth was much lower when it was a standalone company. In the last full quarter before Microsoft acquired it at the end of 2016, LinkedIn’s revenue growth rate was just 23%.
Innovative strategy helping LinkedIn’s growth
Microsoft is also bringing innovations to how LinkedIn can be seamlessly integrated with its products. Microsoft is integrating Office 365 with LinkedIn so that Outlook users can email their LinkedIn connections directly. Early this year, Microsoft also integrated LinkedIn with its Dynamics 365 solution to grow its presence in the CRM (customer relationship management) and ERP (enterprise resource planning) markets. We discussed Dynamics 365’s rapid growth in How Microsoft 365 Quickly Became a Multibillion-Dollar Business.
Microsoft is also promoting LinkedIn to take the inorganic route to grow its business. Last month, LinkedIn announced its acquisition of Glint, a tool for human resource managers to gauge employees’ job satisfaction levels. These initiatives are helping Microsoft to develop yet another growth avenue for LinkedIn.