LinkedIn, founded by former PayPal employees in 2002, is used mainly for professional networking, and reported more than 200 million registered users in more than 200 countries and territories as of January 2013. It is one of the most profitable companies in the Internet sector, with gross margins of roughly 90 per cent.
LinkedIn buys start-up for US$90m
Bloomberg in San Francisco
LinkedIn, the biggest online professional-networking service, is buying start-up Pulse for about US$90 million, accelerating the company's expansion into distributing content for users.
It is paying about 90 per cent in stock and 10 per cent in cash for the application, which is owned by Alphonso Labs.
Founded in 2010 by Akshay Kothari and Ankit Gupta when they were students at Stanford University, Pulse helps users access news and information on mobile phones.
Chief executive Jeff Weiner is using acquisitions and new products to make LinkedIn more relevant to the people already using the site to seek jobs, scout talent and forge professional networks.
"Content appears to be a more effective way of boosting engagement on LinkedIn.com than professional-user groups have been," said Randle Reece, an analyst at Avondale Partners. "Grabbing an early position in the mobile market would be very valuable, long term, as new devices become the mainstream way to access digital content."
LinkedIn has been the favoured stock of all the social-media companies to go public in the past two years. While Facebook, Zynga and Groupon have tumbled, LinkedIn shares have gained 57 per cent this year and have quadrupled since their debut in May 2011.
The Pulse acquisition follows last year's purchase of professional content-sharing site Slideshare for about US$118.8 million, and the revamping of LinkedIn's website in October to make it easier for users to track each other, find connections and share news stories.
Pulse has more than 30 million users who have activated its apps in more than 190 countries, LinkedIn said. More than 750 publishers distribute their content through Pulse.
Kothari and Gupta founded Pulse as a class project, motivated by "frustrations with mobile news reading", they wrote in a blog posting. They turned the tool into a business after seeing the app used by thousands of people and gaining popularity on smartphones.
Pulse raised US$9 million in 2011 from investors, including New Enterprise Associates and Greycroft Partners.