Why LinkedIn Acquired Pulse for $90 Million: A Comprehensive Analysis
LinkedIn, the world's largest professional network, has made several strategic acquisitions to enhance its offerings and maintain its leadership in the professional networking space. One such acquisition was Pulse, a newsreader startup that was acquired for $90 million. This article delves into why LinkedIn acquired Pulse and what benefits it brought to the platform.
Background and Context
LinkedIn's primary function as a professional network meant that it was often seen as a tool for job hunting or networking. To diversify its offerings and increase user engagement, LinkedIn began focusing on making the platform more user-friendly and inviting. This led to the development of several initiatives, including the launch of LinkedIn Today and the hiring of content experts to enhance the user experience.
The Rise of Pulse
Akshay and Ankit, the founders of Pulse, quickly gained recognition in Silicon Valley for their impressive startup. Their newsreader app provided a tailored and engaging news experience to its users, making them a compelling acquisition target for LinkedIn. Despite discussions about a potential acquisition in 2010, the initial valuation was around $1-2 million. However, Pulse had already secured a seed round of $800,000 from venture capitalists, indicating significant early success.
Content and Partnerships
One of the key assets that Pulse brought to the table was its deep library of content partnerships with publishers. This allowed Pulse to serve content directly from publishers within their app, providing a seamless user experience. If LinkedIn could replicate this model, it could significantly enhance the value of its platform by keeping its users on-site and increasing content consumption.
Mobile Focus
Mobile usage was on the rise, and Pulse had already built a strong mobile-first approach. This made them a valuable asset for LinkedIn, which was struggling to make its content initiatives resonate on mobile devices. By integrating Pulse's expertise, LinkedIn could improve its mobile content offerings and engage a broader audience.
Strategic Implications
The acquisition of Pulse by LinkedIn was a strategic move that addressed several of LinkedIn's key objectives:
Increased User Engagement: By providing users with a diverse range of content, LinkedIn could keep them on the platform more often and encourage more interactions. Content Partnerships: Pulse's established relationships with publishers would help LinkedIn serve more content directly on-site, reducing the need for users to navigate away from the platform. Mobile Enhancements: Pulse's mobile-first design and development would help LinkedIn improve its mobile app offerings, catering to the growing number of mobile users.Conclusion
The acquisition of Pulse for $90 million by LinkedIn was a shrewd move that brought significant strategic benefits. By leveraging Pulse's content partnerships, mobile expertise, and user engagement strategies, LinkedIn was able to enhance its platform and stay relevant in the evolving professional networking landscape.