LinkedIn: IPO Will Place Company at Strategic Crossroads - Seeking Alpha

LinkedIn: IPO Will Place Company at Strategic Crossroads - Seeking Alpha

Excerpted:

LinkedIn (LNKD) has been rescued by the Twitter/Facebook phenomenon and is now positioned as the ”professional” networking leader.

The company was started in the horse-and-buggy days of online networking way back in 2003. The first value proposition that stuck with users was the notion that having a professional profile on record made sense, and being able to link with other professionals would be desirable. So, many people found it worth their time to create a free profile and the company grew.

At the end of the first year they reached 500,000 users. By the end of 2004 they reached 1.6m members, then 4m at the end of 2005, and 9m by the end of 2007. Even as the company reached 33m members at the end of 2008 there were some bumps in the road as the credit crisis and economic turmoil forced the company to lay off employees, change their CEO and do some soul searching.

That difficult period has left some scars on the company in terms of both strategy and execution. The success of Facebook begged the question whether LinkedIn should be a ”Facebook for businesses” or remain more of a professional network. At the same time, Twitter was growing rapidly among technologists and consumers. Under the current CEO the company has basically focused on where the money is, which is in recruiting, advertising and premium services. Since then member growth, revenues and profitability have been excellent.

Where does LinkedIn go from here? In the short term their strategy should work well as the economy and the job market continue to recover. More and more members will want premium services and more companies will be spending on corporate, recruiting and marketing services. Longer term though they may have some more soul searching to do.


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LinkedIn: IPO Will Place Company at Strategic Crossroads - Seeking Alpha