What is LinkedIn’s current valuation?

LinkedIn is one of the world’s largest professional networking platforms, with over 810 million members across more than 200 countries and territories worldwide. The company was founded in 2003 and acquired by Microsoft in 2016 for $26.2 billion in cash. Since then, LinkedIn has continued to grow and evolve as part of Microsoft’s product portfolio. But what is LinkedIn’s valuation today? In this article, we’ll look at LinkedIn’s current valuation, revenue, and other key metrics to understand the company’s financial position and value.

LinkedIn’s Valuation History

LinkedIn held its initial public offering (IPO) back in 2011, when it debuted on the New York Stock Exchange on May 19 at $45 per share. This gave the company an initial market capitalization of around $4.3 billion. Here are some key points in LinkedIn’s valuation history:

• At IPO in 2011, LinkedIn was valued at $4.3 billion
• In early 2015, LinkedIn’s market cap surpassed $30 billion for the first time
• Microsoft acquired LinkedIn for $26.2 billion in June 2016
• As a subsidiary of Microsoft, LinkedIn does not have a standalone public valuation

LinkedIn’s valuation soared after its IPO, as the company continued to grow both its membership base and revenues. Microsoft saw LinkedIn as a strategic acquisition in 2016 to accelerate growth of its cloud-based product lineup.

LinkedIn’s Revenue

As a subsidiary of Microsoft, LinkedIn no longer reports its financials separately. However, Microsoft does disclose revenue for LinkedIn as part of its Productivity and Business Processes segment. Here’s a look at LinkedIn’s revenue over the past three years:

As the table shows, LinkedIn’s revenue has increased consistently year-over-year, even after its acquisition by Microsoft. From 2019 to 2021, LinkedIn’s revenue grew by 50%.

LinkedIn User Statistics

LinkedIn’s revenue growth has been fueled by steady increases in its user base. Here are some key statistics on LinkedIn’s members:

• As of October 2022, LinkedIn has over 810 million members worldwide
• LinkedIn added more than 54 million members in 2021 alone
• The company has over 176 million monthly active users
• There are over 58 million LinkedIn members in the United States

LinkedIn continues adding new members at a healthy clip, giving it an expanding audience to monetize through advertising, subscriptions, and other revenue streams.

LinkedIn’s Value Drivers

There are a few key factors driving LinkedIn’s underlying value:

1. Unique professional network at scale

LinkedIn has built a professional network of over 810 million members. The value lies in the ability to connect working professionals across industries and geographies. LinkedIn profiles have become a de facto standard tool for corporate recruiting and job searching.

2. Diversified revenue streams

LinkedIn generates revenue from:

• Advertising sales
• Premium subscriptions
• Recruitment tools for corporations
• Sponsored content
• Affiliate fees from website referrals

This diverse mix offers multiple levers for revenue growth. Premium subscriptions and corporate services have high margins.

3. Integration with Microsoft software and cloud services

Since its acquisition, LinkedIn has been integrating with Microsoft’s enterprise tools like Office 365 and Dynamics 365. There are opportunities to cross-sell and bundle LinkedIn’s offerings with other Microsoft cloud services. Integration will allow LinkedIn to tap into Microsoft’s global corporate customer base.

4. Valuable user data

LinkedIn has over 810 million members providing personal and professional data to build detailed user profiles. This allows targeted advertising and premium products tailored to specific user needs and corporate roles.

5. Scarcity value as a social media asset

LinkedIn is the only large-scale social network focused squarely on professional networking. The concentration of professionals makes it uniquely valuable to recruiters, sales professionals, and marketers compared to Facebook or Instagram.

Estimating LinkedIn’s Valuation

Since LinkedIn is now owned by Microsoft, it does not have a standalone public market valuation. However, analysts occasionally estimate hypothetical valuations for LinkedIn based on comparables. Here are some valuation estimates:

• In late 2020, RBC Capital Markets estimated LinkedIn could be worth $75 billion as a standalone company.
• Based on Microsoft’s price to earnings ratio in 2022, LinkedIn’s implied valuation would be approximately $70 billion.
• Using EV/EBITDA valuation methods, LinkedIn could potentially be valued between $50-60 billion.

These valuation estimates vary widely based on the methodology used. But most put LinkedIn’s standalone value between $50-75 billion based on current financial metrics.

Conclusion

As Microsoft’s largest acquisition to date, LinkedIn was an opportunistic purchase giving Microsoft a strong presence in professional social media and corporate recruiting. While LinkedIn does not have a public market valuation today, analysts estimate its standalone value between $50-75 billion based on revenue, profits, user statistics, and strategic positioning. Going forward, LinkedIn is likely to continue benefitting from integration within Microsoft’s cloud and enterprise ecosystem. With over 810 million members globally, LinkedIn remains one of the most important business networks worldwide.