A Study on LinkedIn Platform Business Model

A Study on LinkedIn
Platform Business Model
+ 91-95832-01634
sssatpathy22@gmail.com
SEPTEMBER 08 & 09, 2017
BY: SWAYAM SIDDHA SATPATHY
DOCTORAL STUDENT – BIRLA GLOBAL UNIVERSITY

A Study on LinkedIn Platform Business Model
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Abstract
Platform business model acts like an interface between consumer & producer. This model is used
by many renowned & start-up companies. This helps in evolving the business by providing more
value to customer. Industry have a strong incentive to evolve towards business model that enable
them to gain access to additional data about their customers, data that’s not more broadly available
to the platform owner. The result will be an increasing emphasis on the data dimension of business
model evolution where participants can focus on persuading customers to share more of their data
in return for providing more descriptive, predictive and prescriptive value to the customer. Now
the data platform model will be able to focus tightly on the areas where they have the greatest
differentiation to provide world class complementary products and services conveniently and
reliable to their customer. In this paper differentiation between Linear & Platform business model
is elaborated. LinkedIn have adapted the business platform strategy connecting organization &
professional across nation to share their portfolio with other professional connected through
LinkedIn.
Keywords: Business Model, Gravity, Toolbox, Magnet, Matchmaker & LinkedIn
Introduction to Platform Business
The platform business basically creates value by using APIs. Whereas as linear model create value
in the form of goods or services and then sell them to someone downstream in their supply chain.
Value is produced upstream and consumed downstream. There is a linear flow, much like water
flowing through a pipe. But the platform business creates value by facilitating exchanges between
two or more interdependent groups typically a consumer & a producer. Had the internet not come
up, we would never have seen the emergence of platform business models. This ability to “plug-
and-play” is a defining characteristic of platform thinking. Encyclopedia Britannica worked on a
linear model but Wikipedia has flipped it and built value on a Platform model.
Classification of Platform Business Model:
Consumer to Consumer; is a business model that facilitates the transaction of products or services
between consumers for Ex- Ebay, Airbnb

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Business to Consumer; transactions conducted directly between a company and consumers who
are the end-users of its products or services for Ex- Netflix, Uber
Business to Business; refers to business that is conducted between companies for Ex- GE, IBM
Watsons & LinkedIn
Literature Review
Harvard Business Review pointed out three factors for the success of a platform strategy:
1. Connection: how easily others can plug into the platform to share and transact
2. Gravity: how well the platform attracts participants, both producers and consumers
3. Flow: how well the platform fosters the exchange and co-creation of value
Successful platforms achieve these goals with three building blocks:
1. The Toolbox creates connection by making it easy for others to plug into the platform. This
infrastructure enables interactions between participants. For example, Apple provides
developers with the OS and underlying code libraries; YouTube provides hosting
infrastructure to creators; Wikipedia provides writers with the tools to collaborate on an
article.
2. The Magnet creates pull that attracts participants to the platform with a kind of social
gravity. For transaction platforms, both producers and consumers must be present to
achieve critical mass. Apple needed to attract both developers and users. Similarly, eBay
needed both buyers and sellers. Platform builders must pay attention to the design of
incentives, reputation systems, and pricing models. They must also leverage social media
to harness the network effect for rapid growth.
3. The Matchmaker fosters the flow of value by making connections between producers and
consumers. Data is at the heart of successful matchmaking, and distinguishes platforms
from other business models. The Matchmaker captures rich data about the participants and
leverages that data to facilitate connections between producers and consumers. For
example, Google matches the supply and demand of online content, while marketplaces
like eBay match buyers to relevant products.

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LinkedIn leverages on Platform Model
As we understood the platform model now we will study how LinkedIn uses platform business
model to connect professional with professional. LinkedIn was co-founded by Reid Hoffman, a
former Executive Vice President in charge of business and corporate development for PayPal. The
site, which was launched in May 2003, currently has over 467 million members from 200
countries, representing 170 industries. It lists more than 10 million active job posts and data on
more than 9 million companies, according to a blog post by Aatif Awan, vice president of growth
and international products for the Mountain View, California based company. According to Reid
Hoffman, 27 percent of LinkedIn subscribers are recruiters. Microsoft acquired LinkedIn in June
of 2016 for $26.2 billion.
LinkedIn, a social networking website aimed at professionals, allows members to contact past and
current colleagues, look for a new job, uncover new business opportunities and network with
experts within a particular industry. LinkedIn members exchange information and ideas to further
their careers and achieve personal and professional goals. More than 100 million business
professionals have already taken this advantage of LinkedIn's networking opportunities.
On LinkedIn, the basic type of connection is a contact you know personally and who you trust on
a professional level. Once you've "connected" to them on LinkedIn, you are considered a 1st-
degree connection. You also have an extended network of connections made up of people that
your connections know. Using just the basic free services is sufficient for many business owners
and it gets you features such as:
 Having a professional profile of skills, experiences, and more
 Limited insight into who's viewed your profile
 Ability to see 100 profiles per search
 Ability to save 3 searches
Upgrading to premium membership increases some of these features such as seeing more
information about who's viewed your profile, the number of profiles per search, and the number
of searches. Plus, upgrades can include additional features such as InMail credits, which allows

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you to message people who are not connected to you, and premium filters, which make searching
faster and easier.
Once you sign up for a LinkedIn account, either free or paid, you can create your own professional
profile. Remember, this is a professional-minded website, so it’s important that information in
your profile represents your business or career. LinkedIn is not the place to share cute baby photos
or party pictures.
Some of the things you can add to a profile include the basics of your resume, a summary of
yourself, your contact information, links to your website and/or blog, previous employers, books
you've written, projects you've worked on, and more. We can add a professional picture, as people
are reluctant to connect with someone without a photo.
Because LinkedIn profile is like a resume or business card, it's essentially a marketing tool. For
that reason, consider writing a benefits-oriented profile, so potential partners can recognize the
advantage of working with you.
Once your profile is complete, you can publish it and start looking for connections. A connection
is a person that you know or would like to know. Essentially, the idea is to create as many direct
connections as you can by adding people within your own professional circle and branching out to
include their connections. Your connections can also provide introductions to other professionals
you might be interested in meeting. Connections can also endorse you for skills and provide you
with recommendations.

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The model will let us know what all we can do with the LinkedIn platform
Fig- I
LinkedIn Features for the year 2017
LinkedIn users visited the site very frequently but at the end of year 2016 that’s not a great monthly
active user number, and the website redesign was meant to “create more value” for LinkedIn
members.
6 New LinkedIn Features added very recently
1) A new homepage feed
Using a combination of human editors and new algorithms, LinkedIn started surfacing more
content and fewer status updates. The homepage feed starts suggesting organic, sponsored, and
native advertising content users might be interested in reading. The feed help users follow trending
Transactions
Doing "business" like hiring, job
serach,sales prospecting & promotion
Reach
Expansion of network & audience
Research
Regular use to prepare, discover,
uncover & connect via search
functionailty
Reputation
Leveraging as reputation tool via
profile, content, recommendations,
endorsements network
Presence
The foundation being there in a
useful,credible way

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stories. LinkedIn had tried to make its user base engage more on the platform, modeling a feed in
the style of Facebook.
2) More analytics
LinkedIn now provides more analytics about how other users interact with the content you share -
not just who views your profile or who likes one of your posts. Now, users can see not only who
likes their content, but which companies they come from and what roles they’re in.
3) New (and missing) search features
LinkedIn refined its search capabilities so users can search all of LinkedIn with a single, unified
search experience based on certain keywords. Now, users can easily toggle between different
categories related to search terms without having to move between different categories of the site.
Whereas previously, LinkedIn users had to go into each of these sections (“People,” “Jobs,”
“Companies”) in order to conduct searches, now users can search from one place to get all of the
results they’re looking for.
Notably, LinkedIn removed some of the Advanced Search filters that were previously available on
LinkedIn Premium and are now only available for the more expensive Sales Navigator tier of
LinkedIn Premium. These filters include “years of experience,” “function,” and “seniority level.”
4) Chat-like messaging
LinkedIn rolls out messaging that allows users to send InMail like a chat instead of an email. Users
won’t have to navigate to another pane to send a private message instead, they’ll be able to send a
direct chat without leaving the LinkedIn homepage feed.
In another nod to Facebook’s Messenger layout, this change helps users easily spend more time
clicking around the site. Plus, users might be less likely to send the dreaded default InMail
message if they know it will appear like a chat instead of an email.

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5) Calendar chatbot
Next, LinkedIn is introducing a chatbot. It will look at two connections’ calendars and find and set
times for them to meet directly within LinkedIn’s messenger platform. It hasn’t been rolled out
yet, but in another nod to Facebook Messenger and other bots, this is an addition designed to keep
users spending time on the site. Stay tuned for more news when the bot launches fully.
6) New blogging interface
LinkedIn also now features a slick new publishing platform. Before, publishers had to navigate to
LinkedIn Pulse to write an original blog post. Now, users are one click away from a slick, easy-
to-use blog publishing platform.
How LinkedIn Can Help You Build Your Business?
LinkedIn allows you to:
 Have an online resume and business card where potential clients, customers, and joint
venture partners can learn about and connect with you
 Get online endorsement and recommendation for your professional abilities and your
character
 Get introductions to potential clients, customers, or colleagues
 Search available job postings placed on the LinkedIn website by members. While you can
also search the web for jobs, through LinkedIn, the big benefit is that many job posts are
exclusive to LinkedIn: They aren't advertised elsewhere. Those postings often have a
requirement that you have one or more LinkedIn recommendations. Additionally, there is
a chance that someone within your LinkedIn network already works there or knows
someone who does, giving you a big foot in the door for an interview.
 Join various groups that align with your interests and participate in discussions. Having a
group in common with another LinkedIn user is one way you can invite others into your
network. Each group discussion contains its own job listings. Further, it's a place to share
your expertise, and built trust and rapport needed to cultivate new clients and customers.

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Staying connected with the outside world isn't the only benefit LinkedIn has to offer. Learning
how to use LinkedIn and maximizing all it offers can provide stronger professional connections
and boost your online reputation better than most other social networking resources.
LinkedIn Platform Business Strategy Model
Fig- II
LinkedIn
Business Platform
Stratergy
Value Added
Toolbox
Magnet
Matchmaker
Value
Distributed
Proximity
Interest
Communities
Value
Constructed
Engagement
Learning
Feedback
Value
Creation
Connectivity
Attraction
Purpose

9
LinkedIn Value Chain
MULTI-STAKEHOLDERS INFRASTRUCTURE
Margin
Customer
network
management
Recruiting
technical,
administrative
personnel
Recruiting technical
staff
Professional
development
&
Management
development
program
Providing training and development program: Employee assistance program, Professional
development & Management development program
Co-creation
development
Web design
Supporting JavaScript
& rest APIs
Supporting
information
retrieval
systems, social
graph system,
data
infrastructure
Marketin
g
research,
sales &
marketing
support
Service
support
Open
procurement Different computer equipment, flow of information
LinkedIn
members:
Students
Professionals
Members aid
information on their
profile which creates
valuable data
Platforms in
order to use
LinkedIn:
Computers,
mobiles,
tablets
Members
build
their
network
and the
solution
becomes
more and
more
attractive
Service is
critical to the
quality of
interaction
between
members
which is the
core of
LinkedIn's
business
Open Inbound
logistics
Co-operations
Outbound
logistics by
customers
Viral
(Marketi
ng &
Sales)
Communities
of practice
Fig- III

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Conclusion
The ability to leverage platforms is no longer restricted to Internet upstarts. Nor is the incumbent’s
response restricted to merely attempting to fight back, or trying, usually in vain, to build a copycat
platform after their industry has been colonized.
The leaders of incumbent companies who understand the new business model can begin building
tomorrow’s platforms in a way that not only leverages their existing assets, but strengthens and
reinforces them.
LinkedIn for B2B Marketers
Fig- IV

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Reference
1) http://www.marketingjournal.org/the-big-shift-in-platform-business-models-john-hagel/
2) http://www.iosrjournals.org/iosr-jbm/papers/Vol16-issue8/Version-2/D016822229.pdf
3) https://www.applicoinc.com/blog/platform-vs-linear-business-models-101/
4) https://en.wikipedia.org/wiki/Business_model
5) http://isites.harvard.edu/fs/docs/icb.topic1465373.files/
6) http://www.businessnewsdaily.com/5084-what-is-c2c.html
7) http://www.smartcompany.com.au/business-advice/strategy/the-three-elements-of-a-
successful-platform-strategy/
8) https://fifthelephant.in/2017/
9) http://platformed.info/platform-thinking-business-model/
10) http://www.pwcacademy.lu/Pages/courses/modules/module-3-linkedin.aspx
11) https://www.slideshare.net/ninermac/migrating-to-drupal-open-source-library-intranets
12) https://blog.hubspot.com/marketing/new-linkedin-features
13) https://www.thebalance.com/introduction-to-linkedin-1794572
14) https://www.google.co.in/search?q=linkedin+value+chain+analysis

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