Along with releasing a positive fourth-quarter earnings report, LinkedIn Corp. (NYSE: LNKD), the so-called social network for professionals, also announced that it purchased Bright.com for $120 million in stock and cash.
The acquisition marks LinkedIn's largest purchase to date, so what is Bright? And why does LinkedIn want it?
Bright.com is the product of Bright Media, a data analytics firm that created an algorithm to match job seekers with employers. It was founded in 2011 by Eduardo Vivas, who explained in a blog post about the acquisition that his goal was “to use data science to enable the labor market to operate more efficiently.”
In the first 18 months, Bright did what it claims was the study of résumés and job descriptions in history. The study included 2.8 million résumés, 8.6 million job seekers and hundreds of recruiters and HR professions. A team of nuclear physicists, astrophysicists, geophysicists, neuroscientists, organizational psychologists, teachers and a five-time "Jeopardy" champion evaluated the data, and on June 19, 2012, Bright launched the “Bright Score” to evaluate a job seeker’s match for a particular job.
“In the last two years, we’ve calculated billions of scores,” Vivas wrote. “Many different independent analyses have validated that we are the best at what we do and we’re very proud of our work.”
LinkedIn’s resources will allow Bright to apply its technology across the economy. For LinkedIn, Bright’s technology will be used to improve the LinkedIn’s recommendation engine, making suggestions to both employers and job seekers more relevant.
“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,” Deep Nishar, LinkedIn’s senior vice president of products and user experience, said in a press release about the acquisition.
LinkedIn released a slideshow on SlideShare explaining the acquisition.
The deal is expected to close during the first quarter of 2014, and will consist of 73 percent stock and 27 percent cash. It isn’t clear if the whole Bright team will move over to LinkedIn, but the acquisition announcement noted that the “Engineering and Product” team will join LinkedIn.