LinkedIn Acquires Pulse Mobile-News Reading Tool for $90 Million

LinkedIn Corp., the biggest online professional-networking service, said it’s buying startup Pulse for about $90 million, accelerating an expansion into distributing content for users.

The company is paying about 90 percent in stock and 10 percent in cash for the application, which is owned by Alphonso Labs Inc., Mountain View, California-based LinkedIn said yesterday in a statement.

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 Officer 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 than professional-user groups have been,” Randle Reece, an analyst at Avondale Partners LLC, wrote in an e-mail. “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.”

Reece, who’s based in Nashville, Tennessee, has the equivalent of a buy recommendation on LinkedIn.

LinkedIn, which has more than 200 million users, has been the favored stock of all the social-media companies to go public in the past two years. While Facebook Inc., Zynga Inc. and Groupon Inc. have tumbled, LinkedIn shares have quadrupled since their debut in May 2011. The stock rose 1.6 percent to $180.18 yesterday at the close in New York, and has gained 57 percent this year through yesterday.

Reading ‘Frustrations’

The Pulse acquisition follows last year’s purchase of professional content-sharing site Slideshare Inc. for about $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. The application competes with Flipboard Inc., a news-reading service for tablets and smartphones.

Pulse founders 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 $9 million in 2011 from investors, including New Enterprise Associates and Greycroft Partners, following an $800,000 seed round the year before.

Julie Inouye, a spokeswoman for LinkedIn, declined to make Pulse’s two co-founders available for comment.