In early 2013, LinkedIn announced that it would acquire Pulse, a news reader app, for $90 million. This acquisition was seen as part of LinkedIn’s strategy to become a content platform and grow their user engagement. At the time, LinkedIn had 225 million members globally while Pulse had around 20 million active monthly users. The purchase of Pulse gave LinkedIn access to a new audience and strengthened their ability to distribute content. In this article, we’ll take a closer look at LinkedIn’s acquisition of Pulse, including the purchase price and strategic rationale behind the deal.
About LinkedIn and Pulse
LinkedIn is the world’s largest professional social networking platform. Founded in 2002, LinkedIn allows members to create profiles summarizing their professional accomplishments and connect with other professionals around the world. As of 2023, LinkedIn has over 875 million members in more than 200 countries.
Some key facts about LinkedIn:
- Founded in 2002
- Went public in 2011
- Corporate headquarters in Sunnyvale, California
- Over 875 million members worldwide (as of 2023)
- Owned by Microsoft since 2016 acquisition for $26.2 billion
Pulse was founded in 2010 as a news reader and content curation app for various platforms including iOS, Android, and the web. The app used algorithms to identify trending online content and news for users based on their interests and sharing behavior.
Some key facts about Pulse prior to acquisition:
- Founded in 2010 by Akshay Kothari and Ankit Gupta
- Based in Palo Alto, California
- 20+ million active monthly users
- Available on iOS, Android, and web
- Backed by investors including LinkedIn
So in summary, LinkedIn was an established social network looking to expand into content while Pulse offered an intelligent news reader with an engaged user base. The complementary strengths of the two companies made the acquisition seem strategically logical.
Details of the LinkedIn-Pulse Acquisition
In April 2013, LinkedIn announced that it would acquire Pulse in a cash-and-stock deal worth approximately $90 million. This valuation was based on Pulse’s user base, technology, and growth potential.
Some key details about the acquisition:
- Announced April 11, 2013
- $90 million purchase price
- Cash and stock deal – breakdown not disclosed
- Pulse had raised $10 million in venture funding prior to acquisition
- Pulse’s 20+ person team would join LinkedIn
LinkedIn CEO Jeff Weiner expressed excitement about the deal, saying Pulse’s team had “created a terrific app that users love, and we want to help them make it even better.” Pulse’s CEO Akshay Kothari also shared optimism about joining LinkedIn and helping create “the definitive professional publishing platform.”
While the exact breakdown was not revealed, the $90 million price tag suggests LinkedIn paid a healthy premium for Pulse. The deal was likely mostly cash given Pulse’s earlier venture funding valuation was undisclosed but typically much lower than $90 million.
Strategic Rationale for LinkedIn
So what drove LinkedIn to acquire Pulse? There were a few key strategic benefits the professional social network aimed to gain:
Strengthen Content Distribution
LinkedIn was looking to become a publishing platform where users come not just to connect but also to consume high quality content. Acquiring Pulse allowed LinkedIn to distribute content in a more engaging, algorithmic way tailored to user interests.
Expand User Base
Pulse brought with it an active user base of 20+ million users. Linking those accounts with LinkedIn accounts offered the potential to drive increased user engagement.
Mobile Growth
Pulse’s apps on iOS and Android offered LinkedIn more exposure on mobile, an increasing important platform. Integrating Pulse’s technology could help improve LinkedIn’s fledgling mobile usage.
Personalization Capabilities
Pulse’s content personalization technology was arguably its biggest asset. LinkedIn wanted to integrate these capabilities to serve content recommendations to users and provide smarter notifications.
Talent Acquisition
In addition to the technology, LinkedIn gained Pulse’s employees and management, including founder Akshay Kothari. Keeping this talent within the LinkedIn family prevented a competitor from scooping them up.
Integrating Pulse into LinkedIn
Following the acquisition, LinkedIn got to work incorporating Pulse’s capabilities into its platform. Here’s a quick look at some of the major integrations:
Pulse App Sunsetting
By the end of 2013, LinkedIn announced it would discontinue the stand-alone Pulse app in order to focus on using its technology across LinkedIn. Most Pulse users were transitioned to using LinkedIn for their news.
Content Recommendations
In 2014, LinkedIn integrated Pulse’s algorithmic content recommendations into users’ feeds. This gave members more personalized content catered to their professional interests.
Notifications Platform
Pulse’s technology also powered LinkedIn’s notifications platform, allowing for smarter targeting of notifications based on user activity.
Mobile Usage Boost
Pulse’s mobile technology indeed helped improve LinkedIn’s mobile apps, leading to increased mobile activity among users.
Publisher Platform
Later on, LinkedIn launched their Publisher platform, allowing users to publish long-form posts. This helped transform LinkedIn into more of a publishing platform as intended following the Pulse deal.
Outcome of the Acquisition
It’s clear in hindsight that acquiring Pulse accelerated LinkedIn’s evolution into a content platform:
- Gave LinkedIn the technology to deliver personalized, engaging content
- Fulfilled the goal of becoming a publishing platform via tools like Publisher
- Pulse’s founder Akshay Kothari took on a key product role at LinkedIn
- The deal expanded LinkedIn’s mobile presence and accelerated mobile growth
Pulse helped LinkedIn move beyond just a social network for professionals and become a destination for staying informed and sharing professional insights. While the stand-alone Pulse app faded away, its DNA continues to be part of LinkedIn’s content experience.
Overall, acquiring Pulse for $90 million proved to be a smart strategic move that continues benefiting LinkedIn and its now over 875 million members. It demonstrates how acquiring a smaller startup with complementary capabilities can enhance the product experience of a large platform like LinkedIn.
Conclusion
LinkedIn’s 2013 acquisition of news reader app Pulse for around $90 million served to strengthen the professional social network’s content distribution capabilities. The strategic rationale was to accelerate LinkedIn’s transition into a content publishing platform and improve user engagement, especially on mobile.
Though the Pulse app itself was eventually shut down, its technology and team became integral parts of LinkedIn’s user experience. Pulse’s personalization algorithms now power content recommendations to LinkedIn members. Its founder Akshay Kothari joined LinkedIn’s leadership team. And Pulse’s code and design DNA helped enhance LinkedIn’s mobile presence.
While the exact financial details were not disclosed, LinkedIn likely paid a healthy premium given Pulse’s user base, technology, and growth prospects. The $90 million acquisition price was a strategic investment that continues to pay dividends by providing a more engaging and personalized content experience to LinkedIn’s 875+ million members. For an established platform seeking to expand its capabilities, acquiring an innovative startup like Pulse can be well worth the investment.
