Why LinkedIn Paid $1.5B For Online Learning Firm


Tech firms are making large acquisitions on an almost daily basis, but even by 2015 standards, the $1.5 billion LinkedIn has spent to buy is a lot of money. It's half a billion more than Facebook paid for Instagram in 2012. So why the huge valuation and why does LinkedIn want to go into the online learning business?

For starters, isn't just a startup with potential. The company has been offering online courses since 1995, has offices in San Francisco, London, Sydney and Graz, Austria, and was recently valued at $1 billion by Fortune magazine.

LinkedIn has nearly 350 million members around the world who use the service to connect with other professionals online, but the site has increasingly become a job-finding tool. If people are going to LinkedIn looking for jobs, it's a "no-brainer" that the company should offer online training courses.

LinkedIn CEO Jeff Weiner said in a posting that education is the key to helping his customers find work via his platform. "Without access to education and the ability to acquire skills, many of these opportunities will remain far out of reach for most people," he wrote.

It's a sensible match. has roughly 6,300 online courses and more than 267,000 video tutorials taught by recognized industry experts and LinkedIn has 350 million potential customers.

Both companies generate revenue from a subscription model. offers several tiered subscription services starting at a monthly price of $25. Though most people use LinkedIn for free, it offers a range of premium services ranging from $30 per month for job seekers to $119 for recruiters. It's likely that courses would be built into a premium service but neither company commented on specific plans in their joint statement. They did, however, say that most of the 500 employees are expected to join LinkedIn.

The acquisition is a combination of 52 percent cash ($780 million) and 48 percent stock ($720 million), and is expected to be closed in the second quarter of 2015. has long been the go-to resource for online learning on subjects such as Photoshop, basic HTML, CSS, management practices and many more.

Executives on both sides seem very pleased with the deal. Lynda Weinman, co-founder and executive chair of the board of, said she "couldn't imagine a better pairing than and LinkedIn." Ryan Roslansky, head of global content products at LinkedIn, blogged about the potential integration of learning tools on the LinkedIn platform, imagining that when searching for work, job seekers could be prompted to sign up for an online course that would give them the skills needed to get the desired role. "Together, I believe we can make it even easier for professionals around the world to accelerate their careers and realize their potential through the learning and development of new skills", wrote Roslansky.

Weiner hosted a webcast with his CFO Steve Sordello at 8:45 a.m. EDT on April 9 which you can access here (registration required). 

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