116  CHAPTER 2 • Gaining Competitive Advantage Through Information Systems

CASE 1 The Enduring Success of LinkedIn: From Job Search to

an All-Round Professional Networking Platform
The Internet and the emergence of mobile, LinkedIn, Microsoft obtained access through systems for job searches, but it managed to
social, and cloud computing have enabled the takeover to a huge amount of data: where differentiate itself from other such services
new business models, of which the platform- people work, what they aspire to in life, and and grow its user base before similar services
based business model is one of the most so on. caught up. LinkedIn is fairly well protected
interesting. Many of today’s revolutionary The vast number of users is a critical fac- against new competitors as users are reluctant
businesses are based on providing digital tor for LinkedIn’s success. Since platform- to change to a totally new service when they
platforms through which users create value based businesses do not require the company have invested in creating content and net-
as well as consume user-created content. itself to provide services and products, they works through one service. The most relevant
One example of a platform-based business is depend largely on their users to offer and competitive threat comes from other estab-
LinkedIn, a social networking service used consume services. The network only has lished social networks with a wide user base;
for professional networking. value if users participate, and this dictates the one example is Facebook (now Meta), which
LinkedIn was founded in 2002 and success or failure of the business. LinkedIn launched a new service called Facebook Jobs
launched in 2003. In its early days, it was has been constantly growing its user base, in the autumn of 2016. However, as recently
mainly used by job seekers to post their CVs which is not only enabling its business model as February 2022, this service was shut down
and by employers to post job applications. but also strengthening its competitive advan- outside the United States and Canada. Meta is
The founders targeted “champions,” focusing tage against possible rivals. now facilitating job listings through its Face-
on both companies and individuals that were LinkedIn’s revenue model is based on book Business Page.
popular and powerful to grab the attention of taking advantage of the many possibilities To stay ahead of the competition, it is
other potential users and draw them to the offered by information systems that support important for LinkedIn to use information
website. Though LinkedIn was developed business models. According to LinkedIn, the systems in innovative ways to differentiate its
with a focus on job searches, it has trans- company’s revenues come from talent solu- services. LinkedIn continuously provides
formed over the years to become a social tions, marketing solutions, and premium users with new features in order to expand the
media platform where people can showcase subscription products. Talent solutions offer ways people use the service. For example, as
their skills, talk about issues associated with recruiters and companies the ability to search early as 2008 LinkedIn added an applications
work, build new connections, and develop for employees and advertise job openings. platform that lets users link external services
their skills. As of January 2022, it had over Marketing solutions let other companies add such as blog postings to their profile. Another
810 million user accounts across more than sponsored content and ads to the service. The example is LinkedIn Salary, a feature
200 countries and territories, and it was avail- premium subscription gives users access to announced in November 2016, which lets
able in 25 languages. advanced services, such as tools for job seek- users submit and browse salary information
LinkedIn was acquired by Microsoft in ing that are not available in the free profile, anonymously. In addition to adding new fea-
2016. In July 2021, the company happily for a fee. In 2021, the quarterly revenue from tures in-house, LinkedIn added the creator
announced that this acquisition had been a advertising surpassed US$1 billion for the mode in 2021. This mode puts less emphasis
huge success. For the first time, the annual first time. The company noted that in 2021, on the work experience of users and allows
revenue of LinkedIn was higher than US$10 200,000 new members were joining, 150,000 them to focus on content and build up their
billion. In 2021, LinkedIn noted that its users hours of learning were being consumed, and own community. It is now possible to upload
were spending more and more time on the 11 million new connections being made on a short video to replace the picture that is part
platform: in the period from April to July, LinkedIn every day! and parcel of the traditional resumé.
the number of sessions increased by 30 per- With the help of information systems, The future of LinkedIn is undoubtedly
cent, compared to the previous year. As the LinkedIn has proven itself capable of provid- dependent on continuous innovations that it
acquisition of LinkedIn had been very ing added value to its users by transforming will have to make to attract more users and
expensive (Microsoft paid more than US$26 the simple job-search website into a social entice them to spend more time on LinkedIn.
billion), both LinkedIn and Microsoft made media platform dedicated to professional life Five years after the acquisition by Microsoft,
sure that the world took note of the success and personal branding. When it was first however, CEO of Microsoft, Satya Nadella,
story that LinkedIn had become. Needless to launched in 2003, LinkedIn wasn’t the first had reason to be happy: LinkedIn was defi-
say, regardless of the operational results of service to enter the market using information nitely a huge success story.

Questions
2-42. Using examples, describe possible revenue models related Bishop, T. (2021, July 27). LinkedIn posts first $10 billion year, 5 years after
to social networking services. Microsoft deal but profits remain a mystery. GeekWire. Retrieved December
2-43. How has LinkedIn provided users with added value in 2, 2021, from https://www.geekwire.com/2021/linkedin-posts-first-10-billion-
year-5-years-microsoft-deal-profits-remain-mystery/
comparison to traditional job seeking?
2-44. In what ways has LinkedIn protected itself from Brogan, L. (2021, June 30). How to use LinkedIn creator mode: What market-
competition? ers need to know. Social Media Examiner. Retrieved December 2, 2021, from
https://www.socialmediaexaminer.com/how-to-use-linkedin-creator-mode-
Based on: what-marketers-need-to-know/
LinkedIn. (2022). About us. Statistics. LinkedIn. Retrieved February 28, 2022, LinkedIn Corporate Communications. (July 28, 2021), LinkedIn Business high-
from https://news.linkedin.com/about-us#Statistics lights from Microsoft’s FY21 Q4 earnings. LinkedIn. Retrieved December 2,