LinkedIn (Microsoft)

Reid Hoffman was a PayPal mafia member — he'd been Executive Vice President at PayPal before its $1.5 billion sale to eBay in 2002. He'd been thinking about the problem of professional identity online: Facebook would capture your social life, but where did you represent your professional self, your work history, your career ambitions? On May 5, 2003, he and four co-founders launched LinkedIn, each inviting their professional connections. Hoffman personally emailed 350 people from his address book. The site had 2,700 users in the first week. The growth was slow — only 4,500 members by the end of the first month — but the use case was genuine: people wanted to represent their professional identity and maintain relationships with former colleagues.

LinkedIn's revenue model crystallised around two core businesses: a marketplace for recruitment (companies paying to post jobs and source candidates) and premium subscriptions (members paying for enhanced features including the ability to contact strangers outside their network). The recruiting side proved particularly valuable: LinkedIn had something no other job site had — a professional graph in which the relationship between a candidate's current role, their former colleagues, and their connections was explicitly mapped. A recruiter could identify not just that a candidate was qualified but who in their network knew that candidate and could provide a reference.

LinkedIn went public on May 19, 2011, at $45 per share, raising approximately $353 million. Shares doubled on the first day, closing at $94.25 — a 109% first-day gain that reflected both investor enthusiasm and the relative novelty of a profitable social network going public. The IPO valued the company at approximately $4.25 billion. By the time of the Microsoft acquisition in 2016, LinkedIn had 433 million members, was profitable on an EBITDA basis, and was generating revenue approaching $3 billion annually from a combination of talent solutions (recruiting), marketing solutions (advertising), and premium subscriptions.

Microsoft acquired LinkedIn on December 8, 2016 for $26.2 billion in cash — the largest acquisition in Microsoft's history and one of the largest in technology history at the time. Satya Nadella's reasoning was explicit: Microsoft's productivity software (Office, Outlook, Teams) would be more valuable if integrated with the professional identity and relationship data LinkedIn held. A Microsoft Word user writing a proposal could see their contact's LinkedIn profile; an Outlook user scheduling a meeting could see the attendees' professional context. LinkedIn retained independent operations and continued under CEO Jeff Weiner (then Ryan Roslansky from 2020).

LinkedIn reached 1 billion members in 2023, making it the largest professional network by any measure. Within Microsoft's financial reporting, the "LinkedIn" segment generated approximately $16+ billion in revenue for fiscal year 2024, growing mid-teens year-on-year. The platform had become the essential infrastructure of professional life: a résumé, a job board, a publishing platform, an advertising network, a B2B sales channel, and an e-learning marketplace (LinkedIn Learning) simultaneously. AI features — including AI-assisted job applications, AI-powered InMail responses, and AI-generated profile suggestions — were integrated from 2023. Reid Hoffman's 350 address book contacts had become a billion-person professional record of the world economy.