Understanding LinkedIn: The Business Community & The Economic Graph

Business & Networking

The Evolution of LinkedIn

Editor's Insights

Published May 2024 • 6 min read

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What is LinkedIn? How it Works Founding Story The Microsoft Era The Economic Graph

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LinkedIn is a social networking site designed specifically for the business community. The goal of the site is to allow registered members to establish and document networks of people they know and trust professionally.

01 The Anatomy of a Profile

A LinkedIn member’s profile page, which emphasizes skills, employment history and education, has professional network news feeds and a limited number of customizable modules. Basic membership for LinkedIn is free. Network members are called “connections.” Unlike other free social networking sites like Facebook or Twitter, LinkedIn requires connections to have a pre-existing relationship.

With basic membership, a member can only establish connections with someone he has worked with, knows professionally (online or offline) or has gone to school with.

Connections up to three degrees away (see six degrees of separation) are seen as part of the member's network, but the member is not allowed to contact them through LinkedIn without an introduction. Premium subscriptions can be purchased to provide members with better access to contacts in the LinkedIn database.

02 Founding & Growth

Launched in May 2003

LinkedIn was co-founded by Reid Hoffman, a former Executive Vice President in charge of business and corporate development for PayPal. The site currently has over 300 million members from 200 countries, representing 170 industries. According to Reid Hoffman, 27 percent of LinkedIn subscribers are recruiters.

03 The Microsoft Era

"Microsoft acquired LinkedIn in June of 2016 for $26.2 billion. Even though it was Microsoft's most expensive purchase to date, experts called it a steal due to the rich troves of semi-structured data."

According to some experts, the data that LinkedIn's members freely give away -- job titles, geographies, industry information, skill sets -- made the deal a strategic masterpiece. This acquisition opened doors for deep integration across the Microsoft ecosystem.

04 The Economic Graph

Data-Driven Insight

LinkedIn has been gathering up data across more than 225 million profiles in an Economic Graph to provide policymakers, employers, workers and educators with data-driven insight.

These patterns help align workforce supply with demand. Such insights include:

• ✦ Career progression steps
• ✦ Work migration trends
• ✦ Industry-specific skill gaps
• ✦ City "stickiness" & retention rates

Ultimately, LinkedIn has evolved from a simple networking site into a complex, vital mapping of the global economy's professional landscape.

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