LinkedIn is a social media platform focused on professional networking and career development. It allows members to create profiles summarizing their work history, education, skills, and accomplishments. LinkedIn also enables users to connect with colleagues, search and apply for jobs, join industry groups, and more.
As of October 2022, LinkedIn reports having over 875 million members in more than 200 countries and territories worldwide. This makes it one of the largest professional networking sites globally.
Given LinkedIn’s popularity and reach, many wonder if LinkedIn Corporation, the company that owns and operates the platform, is a publicly traded company listed on the stock market. The short answer is no – LinkedIn is currently a wholly owned subsidiary of Microsoft and not directly listed or traded on any stock exchange. However, Microsoft, LinkedIn’s parent company, is publicly traded.
In this article, we’ll take a closer look at LinkedIn’s history as a company, its acquisition by Microsoft, and the ways in which investors can still gain exposure to LinkedIn as part of Microsoft’s broader business.
A Brief History of LinkedIn
LinkedIn was founded in 2002 by Reid Hoffman, Allen Blue, Konstantin Guericke, Eric Ly, and Jean-Luc Vaillant. The company officially launched the LinkedIn platform in May 2003.
The founders’ vision was to create an online community for professionals to connect with one another and further their careers. LinkedIn differentiated itself from other social networks by focusing squarely on business connections and job opportunities rather than socializing and sharing photos.
In its early years, LinkedIn prioritized adding users, functionality, and value for professionals looking to network online. Key milestones included:
– Reaching 1 million members in March 2004
– Launching individual profile pages in May 2004
– Introducing the ability for businesses to create company pages in February 2007
– Surpassing 25 million members in November 2007
– Launching LinkedIn’s job board in February 2008
– Reaching 100 million members in March 2011
This rapid user growth helped fuel significant investor interest in the company. LinkedIn filed for an initial public offering (IPO) in January 2011 and began trading on the New York Stock Exchange in May 2011 under the ticker symbol LNKD.
Shares were priced at $45 at IPO but closed the first day of trading at $94.25 per share. LinkedIn’s market cap exceeded $9 billion by the end of its first trading day, highlighting investors’ optimism about the professional network’s future prospects.
As a publicly traded company from 2011-2016, LinkedIn continued expanding its suite of products and services while deepening monetization opportunities on the platform like job ads, premium subscriptions, and sponsored content.
Annual revenues surpassed $1 billion for the first time in 2013. The company also began acquiring other businesses to augment its offerings, including professional learning platform Lynda.com in 2015.
In 2016, LinkedIn operated the world’s largest professional networking platform with over 400 million members. However, the company faced slowing user growth and ongoing pressure from investors to boost profitability.
This set the stage for Microsoft to acquire LinkedIn later that year.
Microsoft’s Acquisition of LinkedIn in 2016
In June 2016, Microsoft announced it would acquire LinkedIn for $26.2 billion in an all-cash transaction. This remains one of the largest acquisitions in Microsoft’s history.
At the time, Microsoft CEO Satya Nadella said the deal was central to the company’s ambition to empower professionals worldwide through technology. Bringing LinkedIn’s professional network into the Microsoft ecosystem allowed Microsoft to strengthen its capabilities in areas like identity, professional skills, employment opportunities, and employee productivity.
For LinkedIn, the opportunity to benefit from Microsoft’s resources, technology, and global reach helped drive the decision to be acquired.
The purchase officially closed in December 2016. LinkedIn retained its distinct brand and product experience under Microsoft’s ownership. Microsoft has aimed to uphold LinkedIn’s central purpose of connecting professionals while layering in integrations with Microsoft products like Office 365.
Key moves since the acquisition include:
– Launching native LinkedIn messaging capabilities in 2017
– Redesigning LinkedIn’s desktop site and mobile app experience in 2018
– Expanding LinkedIn Learning as a standalone offering for professional development
– Embedding LinkedIn profiles and newsfeeds in Microsoft Outlook and Windows 10
– Growing LinkedIn’s member base to over 740 million as of October 2022
Microsoft also reports LinkedIn revenues and user figures as part of its broader financial results, underscoring LinkedIn’s importance within Microsoft’s strategic vision.
In 2021, LinkedIn generated over $10 billion in revenue, accounting for approximately 5% of Microsoft’s overall annual revenue. As of October 2022, LinkedIn remains a wholly owned subsidiary of Microsoft.
Investing in LinkedIn as Part of Microsoft
Given that LinkedIn was delisted following its acquisition, it is no longer possible to directly invest in or trade shares of LinkedIn stock. The company is now included entirely within Microsoft from an investment perspective.
However, investors still have several options to gain exposure to LinkedIn’s performance based on Microsoft’s ownership:
– Purchase Microsoft shares: As LinkedIn’s parent company, Microsoft’s share price reflects LinkedIn’s contribution to Microsoft’s financial results. Investing in Microsoft provides indirect exposure to LinkedIn.
– Invest in Microsoft funds or ETFs: Many mutual funds and ETFs focused on technology or communication stocks have Microsoft as a core holding, providing exposure to Microsoft and LinkedIn.
– Evaluate Microsoft’s financial disclosures: Microsoft regularly reports on LinkedIn’s operations, revenue, and user metrics as part of its overall earnings releases and SEC filings. This allows investors to gauge LinkedIn’s progress.
– Follow Microsoft’s messaging about LinkedIn’s strategy: Microsoft executives frequently tout LinkedIn as a key element of the company’s broader strategic vision during earnings calls, investor conferences, and other communications. This signals LinkedIn’s importance within Microsoft.
– Factor valuations during Microsoft acquisitions: When Microsoft acquires other companies as it did with LinkedIn, it provides clues into how Microsoft values large networks and professional communities from a financial perspective.
In summary, while LinkedIn itself is no longer directly publicly traded, investors interested in gaining exposure to the professional networking platform can do so by tracking Microsoft closely across these areas. LinkedIn’s business results remain tied to Microsoft’s overall market valuation and investor sentiment.
Conclusion
LinkedIn operates the world’s most popular platform for professional networking, with over 875 million members globally. When LinkedIn first launched in 2003, the company prioritized rapid user growth before pursuing monetization opportunities like job listings and premium subscriptions.
LinkedIn completed an initial public offering in 2011 and traded on the NYSE for several years as an independent public company. But in 2016, Microsoft acquired LinkedIn for $26.2 billion as part of its ambition to transform work through technology.
Since the acquisition, LinkedIn has continued strengthening its platform and integration with Microsoft products for professionals. Though no longer independently traded, LinkedIn’s financial performance as part of Microsoft provides investors and analysts ongoing visibility into the professional networking sector.
Those interested in gaining investment exposure to LinkedIn can essentially do so by purchasing Microsoft stock, investing in Microsoft-focused funds and ETFs, monitoring Microsoft’s disclosures about LinkedIn, or evaluating Microsoft’s strategic moves in the professional networking space.
So in summary – no, LinkedIn itself is not directly listed on the stock market anymore. But Microsoft’s ownership of LinkedIn means that Microsoft’s share price and valuation do reflect and incorporate the professional platform’s operations and upside potential.
Key Takeaways:
– LinkedIn operates the largest professional networking platform but is no longer a publicly traded company after being acquired by Microsoft in 2016.
– Microsoft purchased LinkedIn for $26.2 billion as part of its strategy to transform work through technology products and services.
– Investors can gain exposure to LinkedIn by investing in Microsoft or Microsoft-focused funds and ETFs.
– Microsoft provides regular disclosures on LinkedIn’s user metrics, operations, and financial performance as part of its overall business.
– Evaluating Microsoft’s strategy and M&A moves related to professional networking provides additional insights into LinkedIn’s outlook and valuation.