LinkedIn has found a way to grow its recruiting business since joining Microsoft

Key Points
  • An enterprise program for the Talent Solutions business in LinkedIn has been bringing LinkedIn a larger budget within Microsoft, Jeff Weiner said.
  • LinkedIn has seen its revenue accelerate in three consecutive quarters, Weiner said.
Satya Nadella and Jeff Weiner on Microsoft acquiring LinkedIn, June 13, 2016.
Source: Microsoft | YouTube

Microsoft subsidiary LinkedIn has figured out how to expand its key Talent Solutions business, LinkedIn CEO Jeff Weiner said at an event on Wednesday.

The strategy suggests that LinkedIn is trying out one of the mechanisms that Microsoft has sometimes looked to for growth in the past: selling software to more people within a company.

LinkedIn has developed an enterprise tier of Talent Solutions, which includes the LinkedIn Recruiter tool for finding job candidates, Weiner told Goldman Sachs analyst Heather Bellini at the Goldman Sachs technology and internet conference in San Francisco.

Here's how Weiner portrayed the change during the talk:

We're starting to gain some traction with what we call the Talent Solutions Enterprise Program, which has revisited our business model and has broadened the potential addressable opportunity within the customers already served, who may have said that they didn't necessarily have the budget to reach their entire force of recruiters and sourcers and hiring managers -- that they were purchasing products, pretty high-ticket item, for the people who use us most intensively. But we knew that everyone within the organization who is related to that process could benefit through the tool.

Weiner, who joined Microsoft's senior leadership team as part of the $26.2 billion acquisition in 2016, said the program has led to positive results for the group:

"And so we went back to the drawing board and thought through that business model and are now able to effectively reduce the cost per seat or cost per user while materially expanding the footprint within the organization, and the net result is more budget being allocated to LinkedIn," he said.

In other words, by lowering the cost per user, LinkedIn found that companies are buying access for more users, and thereby increasing the overall amount of money they're spending with the company.

Microsoft executives repeatedly called out LinkedIn growth on its fiscal second-quarter earnings call last month.

LinkedIn has now seen revenue acceleration three quarters in a row, Weiner said.