Relationships Matter

“From the day we launched, LinkedIn has been about helping professionals build and maintain trusted relationships online”

- Reid Hoffmann, founding CEO

Introduction

About LinkedIn

Company Information

LinkedIn started out in the living room of co-founder Reid Hoffman in 2002,with Allen Blue, Konstantin Guericke, Eric Ly and Jean-Luc Vaillant

The site officially launched on May 5, 2003. 4,500 members in network at end of the 1st month

The company is publicly held and has a diversified business model

Headquartered in Mountain View, California

LinkedIn is currently available in twenty languages

LinkedIn has more than 4,200 full-time employees with offices in 26 cities around the world.

Full-time employees worldwide-2012: 2,100; 2011: 1000+; 2010: 500+

Reid Hoffman

Cofounder of LinkedIn

Reid is a 1990 Stanford universitygraduate, and have worked with Apple Computers, Fujitsu

He founded SocialNet.com – a website for online dating and matching up people with similar interests.

Association with Paypal

was a member of board of directors at founding of PayPal, became COO of Paypal in January 2000.

was executive vice president of PayPal at the time of PayPal's acquisition by eBay in 2002.

AlexaTrafficRanks

Market Leader in Professional Network

Presence in 200 countries

Historical Evolution

Historical Evolution

Investors- Sequoia Capital in 2003 2008, Sequoia Capital, Greylock Partners, and

other venture capital firms purchased a 5% stake in the company for $53 million, giving the company a post-money valuation of approximately $1 billion.

In 2010, Silicon Valley Insider ranked it as No. 10 on its Top 100 List of most valuable start ups. By December, the company was valued at $1.575 billion in private markets.

LinkedIn filed for IPO in January 2011 and traded its first shares on May 19, 2011, under the NYSE symbol "LNKD". Shares prices closed at $94.25, more than 109 percent above IPO price.

In 2011, LinkedIn earned $154.6 million in advertising revenue alone, surpassing Twitter

LinkedIn’s fourth-quarter 2011 earnings soared due to the company's increase in success in the social media world.

LinkedIn-then (2003)

LinkedIn-now (2013)

According to Forbes,

“LinkedIn is, far and away, the most advantageous social networking tool available to job seekers and business professionals today.“

Acquisition date Company Business Price Description

04-Aug-10 mspokeAdaptive

personalization of content

$0.6 Million LinkedIn Recommendations

23-Sep-10 ChoiceVendor

Social B2B Reviews $3.9 Million rate and review B2B

service providers

26-Jan-11 CardMunch Social Contacts $1.7 Million Scan and import business cards

05-Oct-11 Connected Social CRM - LinkedIn Premium

11-Oct-11 IndexTank Social search - LinkedIn Search

22-Feb-12 Rapportive Social Contacts $15 Million -

03-May-12 SlideShare Social Content $119 MillionGive LinkedIn members a way to discover people

through content

11-Apr-13 Pulse Web / Mobile newsreader $90 Million Definitive professional

publishing platform

Acquisitions

Business Model

Business Segments

Talent Solutions: Recruiters and corporations pay for:

Branded corporate page on LinkedIn, complete with careers section.

Pay per click-through Job ads that are targeted to LinkedIn users who match the job profile.

Access to the database of LinkedIn users and resumes.

Marketing Solutions: LinkedIn advertisers pay for pay per click-

through targeted ads.

Premium Subscriptions: LinkedIn users pay for:

LinkedIn Business for business users LinkedIn Talent for recruiters LinkedIn JobSeeker for unemployed

LinkedIn users looking for a job LinkedIn Sales for Sales Professionals

Freemium Business Model

LinkedIn is a good example of a Freemium business model.

While the core offering is free for its network members, premium offering (LinkedIn InMails, Profile Stats Pro) comes for a price.

The users can upgrade from a basic account type to Business, Business Plus, or Executive account types.

Multi-sided Platform

LinkedIn has implemented a Multi-sided Platform, which offers different solutions to different categories of users.

To Recruiters- LinkedIn Corporate Solutions, LinkedIn

Jobs, and Subscription products, LinkedIn Referral engine

Talent Basic, Talent Finder, and Talent Pro

To Job Seekers- Job Seeker Basic, Job Seeker, and Job

Seeker Plus

To Marketers- LinkedIn Ads- Display Ads, Custom

Groups, Sponsorships, Whitepapers, and Recommendation Ads

Same-side Network Effects

LinkedIn platform induces the same-side network effects among its members.

This helps in growing the network through word-of-mouth or connection-request-emails.

As the average number of member connections grows: the strength of the network improves and the more attractive it becomes to the users on the other sides of the platform.

LinkedIn Mobile App

The LinkedIn mobile audience has greatly evolved over the past years.

Features:•Edit your profile , see who’s viewed your profile •View company profiles •Download LinkedIn connections to your address book •Add your agenda •Mobile ads (which is good news for marketeers/recruiters)

B2B caterings

LinkedIn INfluencer

LinkedIn INfluencer – launched in Oct 2012 - shows articles from top users.

An invitation-only program designed to bring together "the world's top thought leaders to share their insights" with LinkedIn's more than 238 million members.

Even Bill Gates has a profile on LinkedIn!

Financial Summary

Financial Summary

Revenues in 2012 $ 972.31 million(up from $ 522.19 mn in 2011 – 86% increase) $ 325 million in third quarter of 2013

Net Profit in 2012$ 21.61 million(up from $ 11.91 mn in 2011)

Segment-wise Revenues:Segment Revenue ($

mn)Proportio

nHiring Solutions 523,582 53.85%

Marketing Solutions 258,278 26.56%Premium

Subscriptions 190,449 19.59%

972,309

Competitive Rivalry in

Industry

Threat of New

Entrants

Bargaining Power of Suppliers

Threats of Substitutes

Bargaining Power of

Customers

Porter’s Model

Threat of New Entrants

YASNS

Moderate Threat of New Entrants

Low initial capital requirement

Moderate switching costs

Low barriers of entry

High time requirement to establish brand value

Existing SNSs have economies of scope over LinkedIn [PNS]

Threat of New Entrants

Moderate to Low Bargaining Power of Buyers

LinkedIn is the largest PNS in the world -Buyer group is not concentrated

High concentration in PNS industry

Advertising that blends with core identity

Not many switching costs

We did not analyze the bargaining power of suppliers as it is not relevant to a website

Bargaining Power of Customers

Threat of Substitutes

Moderate to High Threat of Substitutes

, used primarily for job searching; not networking

Specialized professional networks

In the future, we believe the threat of substitutes and industry rivalry will increase as large companies venture into this indusry [FB, MySpace etc.]

Competitive Rivalry in Industry

Moderate to High Industry Rivalry

Competition not only with other PNS, but also SNS

Majority of new users come from invitations from existing users

If LinkedIn opens up its platform, it would favor the competition in its favor

There is not much product differentiation

MySpace, Plaxo, Facebook, XING etc

Competition

Plaxo, Xing, CiOZone, MedicalMingle etc. are growing fast

Facebook, the largest market holder in SNS, and MySpace can enter into PNS market

Other potential competition in networking, not specific to PNS, are Google+, Tagged, Reddit etc.

Our Future is Mobile-John Weiner , CEO

2011 Q1

• 8% Unique visitors came from mobile

2013

• 38% unique visitors

2014

• Expected to reach more than 50 % unique mobile users.

2.5x

Economic graph

Key Metrics

Current Growth

Registered Users

Number of Page Views

Number of LinkedIn corporate solutions customers

Sales-Channels Mix

Thank You!