While the U.S. Labor Department was reporting weaker-than-expected job growth for January, LinkedIn (LNKD) was sharing the news that it has purchased job search specialist Bright for $120 million. Bright is one of many online job sites where companies can access the resumes of hundreds of potential hires, but the San Francisco startup distinguishes itself with proprietary algorithms that it says enable recruiters to quickly find the very best candidates for their position.
Bright’s platform analyzes each candidate’s resume and uses the resume data as well as the structure of the document itself to assign each candidate a Bright Score when a recruiter’s search brings up that resume. So a candidate might receive a low Bright Score for one job based on mismatched qualifications, but a high score for another job that the software deemed a perfect fit.
Whether or not Bright will be a perfect fit for LinkedIn remains to be seen, but at the very least LinkedIn has eliminated a potential competitor in the online recruiting space. Recruiting is the biggest part of LinkedIn’s business, with its Talent Solutions unit representing more than half the company’s Q4 revenue of $447.2 million and growing 53% year-on-year. As a venture-backed startup Bright does not disclose financial results, but the company’s website does say it has about 7 million unique monthly visitors. LinkedIn had just under 34 million unique monthly visitors in December, according to Compete.com, and the company says 41% of its unique visits now come from mobile devices.
“What LinkedIn does best is connect talent with opportunity at massive scale,” said Deep Nishar, the company’s senior vice president of products and user experience. “By leveraging Bright’s data-driven matching technology, machine-learning algorithms and domain expertise, we can accelerate our efforts and build out the Economic Graph.” The Economic Graph refers to LinkedIn’s goal of making the global hiring process more efficient through technology.
LinkedIn will finance 73% of the $120 million purchase price through a private placement. The company’s share price has skidded in the hours since it announced the deal, due to the outlook shared as part of its fourth quarter earnings report. LinkedIn predicted a first quarter operating margin of about 23% on revenue of $455-$460 million. Analysts had expected that both revenue and margin projections would be higher.
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