Another amazing quarter from LinkedIn: revenues of $188.5 Million, up
101%, with the “hiring solutions” business now driving $102.6 Million or
54% of company revenue.
LinkedIn’s revenues in the corporate recruiting
market are now larger than Taleo (just acquired by
Oracle for $1.9 Billion),
SuccessFactors (just acquired by
SAP for $3.4 billion), Kenexa, and nearly every other software company which sells recruiting solutions.
Let me highlight how LinkedIn is “fueling the corporate talent machine.”
LinkedIn has become the “must have” in corporate recruiting and is expanding its footprint.
With more than 161 million professional users in its network,
LinkedIn is now the “must-have” tool for corporate recruiters around the
world. The company’s “hiring solutions” business continues to deliver
innovative products which leverage the data in the LinkedIn network for
corporate and contract recruiters.
These products include:
- Highly effective job placement ads (recruiters tell me LinkedIn ads
generate 2-3X the quality of candidates of other ad placements)
- Licensing LinkedIn Recruiter,
the recruiter’s “secret weapon” which lets corporate HR managers and
staffing professionals search, find, and source candidates
- Branded career pages – an offering that lets companies of all sizes
create a highly personalized candidate portal within the LinkedIn
garden of professionals
- Talent Pipeline,
a new feature set within LinkedIn Recruiter which lets recruiters
manage the entire process of “candidate relationship management” – a hot
new application area within corporate HR.
And the company has much more to come.
The Corporate Talent Acquisition Market

Corporate recruiters are in a war for talent.
Lloyds of London’s 2011 risk assessment survey
points out that “Talent and
Skills Shortages” are the #2 rated risk
among 100 business risks today (following the risk of “losing
customers.”)
Despite the high unemployment rate in most countries, companies tell
us over and over that there is a paradoxical mismatch between demand and
supply of skills. And great candidates are not looking for work.
And the cost of sourcing and recruiting is very high.
The average employer spends over
$3500 per hire on all areas of recruiting (
from our Talent Acquisition Factbook®),
and the spending is much higher in executive positions. This means the
entire US marketplace for talent acquisition is around $130 billion by
our estimates, so LinkedIn still has a lot of whitespace to cover.
I just finished meeting with the head of corporate recruiting for
Pfizer
(who is on LinkedIn’s advisory council) and she reinforced that
LinkedIn’s network is truly global and has become one of their primary
tool for finding great candidates.
Pioneering the shift from cloud-based software to BigData applications.
LinkedIn is benefiting from something else here. The company
understands that its future relies in leveraging BigData and the power
of the network over the existing markets for cloud-based HR or talent
acquisition software.
Raj de Datta describes the shift well in his
TechCrunch article “
The Rise of BigData Apps and the Fall of SaaS.” The next big thing is data.
BigData.
I’m not ready to write-off enterprise software businesses by any
means, but ultimately cloud-based applications do become somewhat
commoditized. Now that most major applications are “in the cloud,”
differentiation comes down to architecture, features, and level of
integration with other cloud-based systems.
If you’re an HR manager, can you really tell a huge difference
between Oracle, SAP, Taleo, SuccessFactors, Cornerstone,
SumTotal, and
PeopleFluent?
Workday claims
they are the “next big thing” – but ultimately even new products like
Workday become replaceable. This year I’ve talked with at least a dozen
companies who are coming up for renewal on their cloud-based software
and they are very willing to switch platforms. So the future of
cloud-based software is wrapping all these great applications in rich,
highly-integrated data.
A great example of this is trend is
Salesforce.com.
We are a big user, and it always bothered me that we have to clean and
maintain our own database of accounts when every other Salesforce
customer is doing the same thing. Voila. Salesforce acquires Jigsaw, and
now Data.com is born. You can now buy data to go along with your new
CRM system.
Data, unlike software, becomes increasingly valuable as you collect
more. In the enterprise
Human Resources market companies are dying to
get more data – data about candidates, data about workforce skills and
demographics, data about salaries, and data about their own brand. Once
this data is integrated with your cloud-based application, the value to a
client skyrockets.
And even when you do buy your brand-new cloud-based applications for
talent management, you still need to load them with data in order to
make them work. Not only do you have to load all types of data about
your employees, you also have to load job profiles, assessments,
training modules, and dozens of other types of third party data. As HCM
software companies mature, they will start building and adding their own
data products to their offering.
Companies in the HR space are starting to figure this out.
SHL, a leading global assessment provider recently launched its new
Talent Analytics ”big
data application.” This new platform gives customers access to tens of
millions of assessments to compare candidates against the market and
their competitors.
Data is sticky, proprietary, and ever-increasing in value.
The acquisition of Slideshare drives even greater data value – fueling both memberships and recruiting revenue.

LinkedIn also announced the acquisition of
SlideShare,
a great little company that has become the “YouTube” of corporate
presentations. Slideshare is an addictive application that encourages
you to share your best slide sets with others.
Not only does Slideshare further ignite LinkedIn’s membership
business by extending the data people can add to their profiles, it also
brings tremendous value to the corporate recruiting segment.
Think about this:
Slideshare is
a vast database of knowledge and expertise, all published through
Powerpoint presentations that are easy to view, download, and share.
Some of the most powerful thinkers and practitioners in all industries
publish their deep expertise in SlideShare, and the content is trivially
easy to find and view.
Once Slideshare is fully integrated into LinkedIn, we can expect the
company to link data about slides to data about people. (The company
claims that there are already 9 million content uploads and we can
expect that to explode.)
Every time an individual uploads one of their favorite Powerpoint
decks their “profile” becomes more valuable to others. And since people
can “like” and “comment” on slide sets, LinkedIn can start to see who
the real experts are throughout the network.
Imagine the power of using this information to assess someone’s
skills and experience. By looking at the traffic and ratings of an
individual’s slides, and the relative “authority” of those who link and
recommend these slides, LinkedIn can create one of the most powerful
expertise-networks in the world. The company has been working away on
its “skills” functionality for a few years (look at the “skills”
application under the “beta” link). This will further ignite LinkedIn’s
ability to characterize and understand who the real experts are.
Why is skills information so valuable? Because when recruiters search
for candidates, one of the most important challenges they face is
“finding the right skills.” Companies pay search firms tens of thousands
of dollars to find the best highly-skilled candidate. Putting more
“skills-related” information into LinkedIn creates a new measure of
authority and expertise.
(S
kills have become the new currency of success. While experience
and raw talent still matter, our research shows that jobs are becoming
more and more specialized every year, so deep skills are what makes you
succeed. Read “The End of a Job as you Know It” for more details. )
Plus, of course, Slideshare dramatically increases the amount of
information each LinkedIn user can upload – making the whole network far
more valuable for individuals and members.
By the way, I noticed that LinkedIn recently removed several features
from its free membership service (the ability to see who clicked on
your profile, for example). Every time the company adds a new type of
data-driven content, LinkedIn can come up with new, higher-value
membership packages as well.
LinkedIn is really firing on all cylinders. Watch the company continue to grow as it “fuels the corporate talent machine.”
I would expect LinkedIn’s hiring solutions segment to continue its
growth as a percentage of revenue in the coming quarters. And with
little competition in the BigData market for candidates, we should see
this growth accelerate as the economy picks up steam.
By Josh Bersin, Forbes Contributor
Newscribe : get free news in real time