Who Owns LinkedIn? An Entrepreneur‘s Deep Dive into the Professional Network‘s Ownership, Growth History, and Future Outlook

As a serial entrepreneur who has helped launch several startups and advised many more, I‘m often asked about LinkedIn‘s founding story, acquisition by Microsoft, and current standing. While LinkedIn is a giant in the professional networking space today, it came from humble beginnings and faced challenges similar to many early-stage startups.

LinkedIn‘s journey from scrappy upstart to global behemoth holds valuable lessons for entrepreneurs aiming to scale successfully.

The Tricky Early Days of LinkedIn

LinkedIn was founded in 2002 by Reid Hoffman, an early PayPal executive, along with co-founders Allen Blue, Konstantin Guericke, Eric Ly, and Jean-Luc Vaillant. Hoffman recognized the need for a centralized platform to connect professionals online.

However, gaining initial traction was difficult. The company survived by providing custom networking solutions to enterprises to generate cash flow in the early years.

Signing up new users also proved tricky. LinkedIn‘s masterstroke was allowing members to invite their trusted contacts, seeding growth through professional connections. The invite-only model helped LinkedIn build a foundation of engaged users.

From my experience advising startups, it‘s critical to nail down an effective customer acquisition strategy early on. LinkedIn shows how leveraging networks can be more cost-effective than traditional advertising.

An early investment from Sequoia Capital provided a crucial lifeline, allowing LinkedIn to continue iterating on the platform. I‘ve seen many startups without access to capital forced to sell early when patience and resources could have led to massive growth.

Microsoft Bets Big on LinkedIn‘s Future Potential

In June 2016, Microsoft announced plans to acquire LinkedIn for a staggering $26.2 billion. It was Microsoft‘s largest acquisition ever, exceeding the $8.5 billion purchase of Skype in 2011.

Why did Microsoft pay so handsomely? There were likely several key reasons:

  • Deepen enterprise footprint – Microsoft saw potential to integrate LinkedIn‘s data into Office 365 and Dynamics to strengthen offerings to business customers.
  • Expand talent management capabilities – LinkedIn‘s rich professional data and network effects provide unique talent assessment, recruiting, and learning opportunities.
  • Neutralize threat – LinkedIn could have pivoted into selling software and solutions competitive to Microsoft.
  • Future monetization – Microsoft likely saw potential to expand LinkedIn‘s revenue model beyond subscriptions and advertising. More integrated business services may emerge.

For startups, being acquired often means balancing integration with a larger company while retaining what makes you special. LinkedIn‘s continued independence is instructive – Microsoft provides resources while LinkedIn leads vision and execution.

What‘s Next for the Professional Networking Pioneer?

Today, LinkedIn has over 800 million members worldwide. It‘s the dominant professional networking platform, with over 75% market share by some estimates.

But LinkedIn faces the constant need to innovate and add value as new generations and norms reshape the job market and hiring practices.

Here are some growth opportunities I see for LinkedIn:

  • Video – Short-form video has exploded on platforms like Instagram and TikTok. LinkedIn is investing heavily in video features across messaging, posts, and events.
  • Services marketplace – LinkedIn could create a new marketplace to connect freelancers with businesses seeking project talent. Upwork pioneered this model at scale.
  • Interview prep – With access to data on hiring managers, LinkedIn could help coach job seekers on tailoring their approach for success.
  • Emerging markets – Only 25% of LinkedIn‘s members are outside the U.S. Growing in countries like India, Brazil, and across Africa is crucial.

LinkedIn will need to constantly fight the pull of becoming stagnant, especially with its cash-rich owner. But the opportunity for continued impact is still massive.

As LinkedIn‘s story shows, with the right timing, patience, and vision, a simple idea can change an entire industry – and millions of careers.