Blowout Quarter at LinkedIn: Now the Talent Acquisition Machine (+Slideshare)
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, SuccessFactors, Kenexa, and nearly every other software company which sells recruiting solutions.
Let me highlight some of the major changes taking place in LinkedIn’s corporate recruiting business.
The company is expanding from “hiring solutions” toward many new areas of talent acquisition.
The term “hiring solutions” is no longer correct: LinkedIn now plays in many areas of corporate talent acquisition. Not only does LinkedIn sell ads, the company now generates more than half its hiring solutions revenue from LinkedIn Recruiter, the product which lets corporate HR managers and staffing professionals source candidates.
This month LinkedIn expanded its corporate products to include Talent Pipeline, a system designed to support management of talent leads all the way up to the point of application (at which point they typically enter the ATS as a candidate) . And the company now makes a significant amount of money selling branded career pages and other tools to help promote positions throughout the network.
With a keen focus on leveraging data, LinkedIn is expanding into more and more areas of the talent acquisition market. Remember that the average employer spends around $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.
The Slideshare acquisition, which I discuss below, also compliments the hiring solutions business because it gives recruiters even more information about candidates – their skills, their experience, and the way they think.
LinkedIn’s dramatic growth highlights the shift from Cloud-based software to BigData Applications in HR.
We have all become quite enamored with Cloud-based enterprise software companies over the last few years. Well as Raj de Datta describes in his TechCrunch article “The Rise of BigData Apps and the Fall of SaaS,” the next big thing is data. BigData.
Think about cloud-based software companies. Enterprise HR software is rapidly becoming more and more “commodity like” – many of the features are indistinguishable from vendor to vendor. Can you really tell a huge difference between Taleo, SuccessFactors, Cornerstone, and PeopleFluent?
Sure their products have different features, but most customers tell us that they don’t use 80% of the features they have, and it has become easier and easier for these companies to copy each other.
Data, on the other hand, becomes increasingly valuable as you collect more. In the enterprise Human Resources market companies are dying to get more data – data about candidates, workforce skills and demographics, salaries, and of course the reach and power of their own brand. The next big war for HR software is not a set of new features, it’s figuring out how to collect and share data among many corporate customers.
Remember that an enterprise HR system (e.g. an Applicant Tracking System) without data is virtually worthless. You have to fill it with job profiles, assessment data, competencies, skill maps, interview tracking information, and ultimately candidates. LinkedIn comes “pre-filled” with candidates, so it can redefine the market by focusing on data first.
LinkedIn represents one of the biggest and most sophisticated “BigData Application” (BDA, as Raj puts it) companies – and is now developing more and more applications around it. Other companies that have gone down this path include SHL, the global assessment provider. SHL recently launched its new Talent Analytics product which gives customers access to tens of millions of assessments to compare candidates against the market and their competitors.
PS. Salesforce has already gone this direction in CRM through its acquisition of Jigsaw and new “data.com” offering.
Watch LinkedIn continue to grow faster than other HR software companies because it leverages its huge treasure trove of data.
The acquisition of Slideshare drives even greater data value – fueling both memberships and recruiting revenue.
The company also announced the acquisition of SlideShare, a great little company that has become the “YouTube” of corporate presentations. This further adds fuel to LinkedIn’s data business.
Slideshare is now 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.
Now that Slideshare is integrated into LinkedIn, we can expect it to grow even faster. (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 even 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.
All this information is not only valuable for members to view (helping LinkedIn gain new members), it lets LinkedIn better understand who in its network is an expert at what. LinkedIn has quietly building out its beta “skills” module (check out the “skills” button on the “beta” tab), and now it will get better.
Why is skills information valuable? Because when recruiters search for candidates, one of the most important challenges they face is “finding the right skills.” (Our research shows that jobs are becoming more and more specialized every years – read “The End of a Job as you Know It” for more details. ) So recruiters will pay for this information.
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 expand in talent acquisition and talent management, all fueled by the company’s vast amounts of BigData. With almost no competition in the corporate market, we should see this growth continue and accelerate as the economy picks up steam.