What LinkedIn’s IPO Tells You About LinkedIn

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Social network site LinkedIn filed for its initial public offering yesterday (even though many think the timing is wrong), and in the process, revealed a lot about the company’s inner workings, and how it sees itself. For example, although the site made $10 million profit in the first nine months of last year – from a total revenue of $161 million during that time period, and up from a $4 million loss against $120 revenue for the same time in 2009 – it doesn’t expect to be profitable on 2011: “We expect our revenue growth rate to decline… as we continue to invest for future growth,” according to the S-1 filing. In 2009, the company split its revenues thusly: 38% premium subscriptions, 32% marketing solutions, 30% hiring solutions, but for Q3 last year, that had turned into 45% hiring solutions, 29% marketing solutions, 24% premium subscriptions.

The company describes itself as “the world’s largest professional network on the Internet with more than 90 million members in over 200 countries and territories. Through our proprietary platform, members are able to create, manage and share their professional identity online, build and engage with their professional network, access shared knowledge and insights, and find business opportunities, enabling them to be more productive and successful.” That 90 million + member number is up from 55 million in 2009, although the S-1 explains that there is interesting math involved: “The number of our registered members is higher than the number of actual members, and a substantial majority of our page views are generated by the minority of our members.” Got that? The company considers Facebook, Google, Microsoft and Twitter to be its American competition, but adds that it also sees security and government regulation as potential threats to its growth.

And if you’re wondering what LinkedIn wants the money from the IPO for in the first place, well: “We intend to use the net proceeds from this offering for working capital and general corporate purposes, including further expansion of our product development and field sales organizations, and for capital expenditures. In addition, we may use a portion of the proceeds from this offering for acquisitons of complementary businesses, technologies or other assets.” So, probably buying a lot of Twizzlers, then.

[Via, also]

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