Microsoft’s subsidiary LinkedIn is developing a new service called Marketplaces, to let its 740 million users become or find freelancers. The service will pit the company against the already prominent Upwork and Fiverr platforms.
LinkedIn is a career-focused platform, which is why it makes sense that it would want to tap into a small but thriving and growing market, where white-collar professionals, like developers or accountants, can connect with businesses or individuals that want these services.
Freelancing was boosted by the Covid-19 pandemic as people tried to find new ways to make money without leaving home.
The product is slated for launch in September and could boost LinkedIn’s userbase and bring in more revenue from existing users of the professional networking site. LinkedIn reported last year that it was getting about $30 of revenue every month from active users.
That is almost the same as what Facebook reports as its revenue per monthly active user.
However, it could take some time for the upcoming freelancing product to change things revenue-wise. The Microsoft subsidiary generated about $8.8 billion in revenue last year from subscriptions and job-related ads.
Upwork and Fiverr
In 2020, Upwork and Fiverr generated $550 million in revenue. It is a representation of what their cut was after transacting with white-collar professionals and the businesses that hired them for projects and other tasks.
Upwork reports that it keeps about 13% of transactions as revenue, while Fiverr keeps 37%. The two companies saw their revenue collectively rise by 37%, compared to 2019.
Microsoft executives have discussed separately, allowing future customers of the LinkedIn service, to pay freelancers using a digital wallet Microsoft is developing, where people can store money.
Such options will pair well with the upcoming marketplace.