LinkedIn buys Careerify to beef up recruitment business

LinkedIn makes most of its money from Talent Solutions, connecting recruiters with LinkedIn members

Financial trends and news by Steven Loeb
March 16, 2015
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When most of us think about LinkedIn, we think of it as a social network, and a way to make and keep business connections. From the company's point of view, though, it is more of a referral business, connecting employers to prospective employees.

LinkedIn is building out that side of the business even further with the purchase of recruitment solution Careerify, it was revealed in a blog post from Careerify Founder and CEO Harpaul Sambhi on Monday.

No financial terms of the deal were disclosed, but a LinkedIn spokesperson has confirmed that Three of four Careerify employees have joined LinkedIn, including Sambhi, Director of Software Engineering Luthfur Chowdhury, and Prashant Viswanathan.

They’ve all joined the Talent Solutions business unit at LinkedIn, which develops products that help companies recruit and retain talent. Harpaul is now the product manager responsible for the employee referral software. Luthfur and Prashant have joined the engineering teams. 

Founded in 2009, the Toronto-based Careerify is an online platform offering recruitment solutions in the human resources industry, with customers that include Microsoft, SpaceX, Groupon and Unilever.

It offers three products:  The first is what it calls "internal mobility," which includes employee retention, career management and succession planning features. Second is "employer branding," which helps companies recruit workers with content marketing, employee advocacy and improved messaging. The third is it's employee referral software, which includessocial recruiting, an employee engagement toolkit,  and performance dashboards.

Going forward, Careerify said that it is jettisoning the first two products to focus solely on "improving our employee referral software." Careerify will continue to run its referrals product separate from LinkedIn, but will not be taking on any new customers. 

The LinkedIn spokesperson told me that the company will not be "disclosing any other product plans," in regards to Careerify's referral software.

For Careerify, the decision to sell to LinkedIn was all about one big thing: with LinkedIn's resources, it now has the ability to scale at a much faster rate.

"We decided to join LinkedIn due to what we lacked – massive scale. More than 30,000 companies across the globe leverage LinkedIn for recruitment, and with more than 347 million members, LinkedIn offers an opportunity to make a much larger impact on job seeking and hiring," Sambhi wrote in the blog post. "We are absolutely thrilled to be joining LinkedIn to accelerate our technology and connect talent with opportunity on a massive scale."

For LinkedIn, it helps strength what has become the most profitable side of its business.

The majority of LinkedIn's revenue comes from what it calls Talent Solutions, a.k.a. where recruiters, and corporations that are looking for potential employees, have the ability to pay LinkedIn to connect with members of the network.

In the fourth quarter of 2014, Talent Solutions brought in $369 million, accounting for 57% of the company's $643 million in revenue. That was actually down a percentage point from the same time a year before, when it accounted for 58% of total revenue in the fourth quarter of 2013.

The point is, this is a very important part of LinkedIn's business strategy going forward. 

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