Over the past three years, Microsoft has turned security and gaming into $10 billion annual businesses for the company. Today, July 27, Microsoft added a third $10 billion business to that list: LinkedIn.
As part of its Q4 FY21 earnings announcement, Microsoft officials said revenues from its LinkedIn subsidiary were up 46 percent compared to the year-ago quarter, driven by strong advertising demand in Marketing Solutions, to the tune of 97 percent growth, year-over-year. Microsoft doesn’t disclose exact LinkedIn revenues or profits/losses, but officials did say the LinkedIn advertising business did surpass $1 billion this quarter for the first time.
Microsoft bought LinkedIn in 2016 for $26.2 billion. Since then, the company has only integrated LinkedIn’s products and services very limitedly with existing Microsoft ones. Microsoft has only taken initial steps to moved LinkedIn over to being hosted on Azure, rather than on its own servers. Officials insist this slow integration is by design and that their first concern has been to grow the LinkedIn user base.
A big part of the reason LinkedIn’s numbers look really strong this quarter is because the COVID-19 pandemic-caused sluggishness in job creation, job advertisement and recruiting has been waning in recent months, officials said.
Microsoft reports LinkedIn revenues as part of its Productivity and Business Processes segment, which also includes Office 365 and Dynamics 365. That segment contributed $14.7 billion total to Microsoft’s Q4 FY21 revenues of $46.2 billion. Some, but not all, LinkedIn revenues are counted by Microsoft as part of its Commercial Cloud category.
Microsoft has a number of other businesses that make $10 billion annually, but gaming, security and now LinkedIn are the three newest members of this list.