LinkedIn has created a freelance marketplace. Launched on Wednesday, "LinkedIn ProFinder" asks employers to submit contract jobs in categories such as design, writing, or financial services and promises to send them up to five free quotes from LinkedIn users in response.
Connecting freelancers to work has become a big business for other companies. Thumbtack, a company that uses a similar match-making strategy by asking workers to submit quotes for jobs from wedding planning to accounting to home repair, charges workers a fee each time they bid on a job. Last year, its investors valued the company at $1.3 billion. Upwork, which is better known for the professional services that LinkedIn seems to be targeting—categories on its homepage include design, writing, and legal work—handles more than $1 billion annually in freelance work. Freelancers pay between 5% and 20% of every paycheck to the site.
LinkedIn's version does not yet have a set business model. "We want to continue learning and iterating to ensure we get it right before instituting paywalls," a LinkedIn spokesperson told Fast Company. Currently professionals can submit up to 10 proposals for free. After the 10th job application, they'll need to subscribe to LinkedIn's Business Plus subscription, which costs $60 per month. Eventually, the spokesperson said, LinkedIn might host payments between employers and freelancers, which would mean it could take a commission on each transaction.
Premium subscriptions only account for about 20% of revenue for LinkedIn, which makes most of its money on recruitment tools. Though LinkedIn has also built a Facebook-style advertising business, that revenue stream hasn't been as strong for LinkedIn as it has for its friends-focused peer. (The company shut down its ad network earlier this year.) A freelance marketplace could be an additional source of income that depends not on building a daily web destination, but also upon LinkedIn's biggest strength as a jobs site.
Microsoft agreed to acquire LinkedIn for $26.2 billion last month.
Over the last five years, the number of freelancers on LinkedIn has increased by 50%, according to the company. Through a pilot program launched in October, more than 50,000 of them have access to ProFinder.