Although Microsoft has kept relatively quiet about LinkedIn in its financial reports since the acquisition in 2016, LinkedIn continues to assert itself as a cornerstone of the corporation.

The professional networking site is not just about job recruitment and listings anymore; it is undergoing a transformation by focusing more on advertising and introducing new content formats. Recent financial disclosures by Microsoft reinforce this trend, evident both in terms of financial performance and user base growth…

An Unprecedented Quarterly Revenue for LinkedIn

For the first time in its history, LinkedIn’s revenue has exceeded $5 billion in a single quarter, for the quarter ending in December.

This marks an 11% increase year-over-year and puts the platform on a trajectory to exceed $20 billion in annual revenues. This is particularly noteworthy considering that some initially viewed Microsoft’s $26.2 billion acquisition of LinkedIn nearly a decade ago as overpriced.

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This growth is even more significant as it comes during a time when the job market is less vibrant, impacted by factors like AI and studies such as those from MIT.

Contrary to expectations, it is not recruitment tools but LinkedIn Marketing Solutions, the network’s advertising division, that is primarily driving this growth.

Included within Microsoft’s ‘Productivity and Business Processes’ division, LinkedIn contributes to a segment known for high operational margins, though the specific financial details of the platform are not separately disclosed by the company.

Video: The New Driving Force in Advertising

One of the primary growth drivers identified is video, which has become increasingly significant. According to Satya Nadella, revenue from paid video advertisements has increased by 30% year-over-year.

LinkedIn has significantly pushed forward with short, vertical video formats, clearly influenced by TikTok, but tailored for professional use with career advice, industry analysis, or corporate presentations.

This shift aligns with a broader transformation of user engagement on the platform, aiming to capture more attention while staying true to its professional ethos.

For advertisers, these video formats provide privileged access to a qualified audience in an environment viewed as more credible than other social networks.

A Still-Growing Member Base, Yet Under Regulatory Scrutiny

In its report, Microsoft mentions double-digit growth in the number of members in the last quarter.

However, this positive trend could face challenges due to regulatory issues, as LinkedIn is currently appealing a 310 million euro fine related to the use of personal data for advertising targeting.

If the ruling is upheld, the platform may need to significantly revise its advertising practices, particularly those that are currently driving its growth…