LinkedIn Acquires Lynda.com

But what does it mean?

I woke up last Thursday and followed my regular routine or running a spot check of my newsfeeds and came across the announcement that LinkedIn had bought Lynda.com for $1.5b dollars. Still a bit groggy, my first thought was: “Wait. What day is it?”

I thought it was maybe April Fools.

It’s safe to say that this acquisition took a lot of people by surprise. Not because it doesn’t make sense. Lynda.com & LinkedIn’s visions and missions are beautifully aligned. They’re wonderful, complementary businesses in a number of different ways.

However, there are a number of reason why this acquisition was so surprising: the price tag (which I believe to be low, but that’s another blog post), the overnight expansion of LinkedIn’s market opportunity, and the fact that Lynda.com — recently crowned leader of the online education space with two recent & massive rounds of funding — was scooped up so early in its ascension to that position.

So, the natural first question people are bound to ask is, “Why?”

So, what’s the deal?

The majority of the world only engages with LinkedIn as a professional social network; an online destination to host your resume and to connect with coworkers, prospects and industry peers. Since LinkedIn offers a premium subscription, people understandably could think that this is its primary business model. However, premium subscriptions only accounts for 20% of their revenues.

LinkedIn’s primary business model is recruitment. It’s talent solutions make up 60% of it’s revenue: $1.3 billion dollars.

So, back to the question. What’s the deal?

LinkedIn is positioning itself to own the Global Talent Pipeline as a key strategy in dominating the recruitment space. Everything from the pool of candidates, to the training & development, to the placement. LinkedIn calls this the “Economic Graph,” but I find it easier to understand the potential of what that means by thinking of it as a pipeline.

Once you recognize LinkedIn is a recruitment platform, you understand that their clients are the recruiters and hiring managers. These folks are hiring LinkedIn to help them find the best, most skilled candidates to fill their roles. So, it’s LinkedIn’s job to ensure they have the most skilled & knowledgeable candidate base within their network in order to best serve their clients. That’s where Lynda.com comes in.

In short, with 3,400 courses on topics ranging from coding to marketing to business, Lynda.com represents LinkedIn’s desire to help job seekers level up their skill sets to become more attractive candidates & (ideally) better equipped for success when hired.

How will LinkedIn integrate Lynda.com into its offering?

That’s all well and good for the longterm vision of what LinkedIn is trying to accomplish, but here are some of the ways Lynda.com can start driving value for LinkedIn in the short-term:

1) Talent Solution Value-Add: LinkedIn has stated that they will keep Lynda.com operational as a stand alone product in the short term, but they will begin piloting the sale of it as a part of their talent solutions offering.

2) Increase Consumer Revenue: LinkedIn recognizes that many of its 350m+ professionals would be interested in the professional development + learning opportunities Lynda.com provides. Because both companies have similar, subscription-based business models, it would be easy for them to incorporate Lynda.com access into a LinkedIn premium subscription. I imagine this could be a fast follow once the acquisition is finalized.

3) Strong Market Position: In addition to stepping up its game within the recruitment arena, this acquisition is a pretty clear signal that LinkedIn considers itself a strong contender in the Professional Development space. Now that LinkedIn is an education provider, you can bet that makes a lot of businesses in the professional development, L&D and corporate training spaces are nervous given LinkedIn’s position at the intersection of professionals (their clients) AND companies (also their clients). I think it’s important to reiterate the fact that, with this acquisition, LinkedIn seems to suggest that they are looking to own the Global Talent Pipeline not partner their way to the top. It’s an opportunity for players in the professional development space to take a step back, re-evaluate their SWOT analysis and think through if this is indeed a threat worth taking seriously.

What could the future look like?

To be honest, what excites me the most about this acquisition is the potential for LinkedIn to fill a vacuum in the little-talked about but growing market of non-traditional, micro-credentials.

The workplace is evolving and is requiring new skills at an unprecedented rate. Whether it be social media, data analysis or coding skills, traditional education destinations like universities and colleges are finding it hard to keep up (and many would argue that’s not their job). In addition, many people don’t have time or don’t see the value in investing in a traditional 2–4 year program.

The result? The creation of non-traditional, micro-credentials such as Udacity’s Data Analyst Nanodegree made in collaboration with Facebook and mongoDB; or Coursera’s Specializations where you can earn a certificate in business fundamentals from the Wharton School of Business. Both of these certificates can be completed online, on the student’s own schedule and for a fraction of the time and cost of a traditional diploma or certificate.

These types of micro-credentials can be great for professionals because they have the potential to offer a more affordable and accessible route for life-long professional development. They can also be great for employers as a strong signal of a candidate’s skill set and employability.

The challenge these types of new credentials face is awareness and trust in the market. And that’s where this acquisition has piqued my interest.

With the acquisition of Lynda.com, LinkedIn could very quickly provide a solution to that challenge by offering certificates for course completion. If they decide to go that route, both Lynda.com and especially LinkedIn have enough brand recognition amongst employers to really raise awareness of micro-credentials and, if executed well, they could go a long way in increasing the credibility and integrity of these new micro-credentials. This in turn would go a long way to, in Jeff Weiner’s words, “create economic opportunity for every member of the global workforce.”