LinkedIn Files For IPO And Provides Insights
With more than 90 million users, LinkedIn, the social network that helps professionals connect, filed for an initial public offering. The site which is mainly used for business networking, didn’t reveal the number of shares it plans to offer or price range, but offers insights into its current financials and operations.
The fillings highlight how profitable the business of social networking can be. Currently, LinkedIn’s revenues come from three main sources — advertising, hiring solutions and premium subscriptions. According to the filling, it generated revenues of $120 million for 2009 and $161 million for the first 3 quarters of 2010. Its hiring solutions and advertising have become the company’s primary growth areas, comprising of 41% and 32% of revenue, respectively. It indicated it doesn’t expect profitability in 2011 because of investments in technology and a few other key areas. It also disclosed that a “substantial majority” of its members don’t visit the site on a regular monthly basis.
LinkedIn listed Facebook, Twitter, Google and Microsoft as potential competitors stating that they “could develop competing solutions or partner with third parties to offer such products” but claims to be adding one member per second in its filing. However, for now LinkedIn seems to be king on the professional networking space and the offering will ride on a wave of interest in potential Internet IPOs, including the darling commerce site GroupOn, expected to file soon.
In a bid to increase its revenue, LinkedIn has also recently made a series of changes to its advertising services. The site launched LinkedIn Ads, a self-service pay-per-click product that lets advertisers target by job title, company name or group. The service offers granular targeting and aligns the site with other social media platforms. But according to reports, to make the new ad system worth while, LinkedIn still needs to get allot more eyeballs on the site.
The latest comScore report revealed that LinkedIn had roughly 26.5 million U.S. visitors for last month. In comparison, Facebook had nearly six times as many. And the average Facebook user spent nearly 5.5 hours browsing user profiles, reading feeds, commenting on photos and playing games. The average LinkedIn member spent just 12 minutes on the site, peanuts by comparison. However, LinkedIn’s network and targeting is much more specific. For example you could target ad impressions to members who have recently been promoted to management and work on a certain technology, something with Facebook has yet to offer.
According to a Posting by Mashable, below are IPO Details.
Key Financial Numbers
|Net revenue, Jan-Sept 2010:||$161.4 million|
|Net revenue, 2009:||$80.8 million|
|Total expenses, Jan-Sept 2010:||$148.9 million|
|Total expenses, 2009:||$84.1 million|
|Net income (after tax), Jan-Sept 2010:||$10.1 million|
|Net income (after tax), 2009:||-$3.4 million|
|Cash on hand (as of Sept 30, 2010):||$89.6 million|
|Total assets (as of Sept 30, 2010):||$197 million|
Key Revenue Numbers
|Job listings, Jan-Sept 2010:||$65.9 million (41% of revenue)|
|Job listings, 2009:||$23.75 million (29% of revenue)|
|Advertising, Jan-Sept 2010:||$51.37 million (32% of revenue)|
|Advertising, 2009:||$23.8 million (30% of revenue)|
|Premium subscriptions, Jan-Sept 2010:||$44.1 million (27% of revenue)|
|Premium subscriptions, 2009:||$33.2 million (41% of revenue)|
Key Revenue Numbers
|Registered users:||90 million (as of December 31, 2010)|
|Unique visitors:||65 million (average of Oct, Nov and Dec)|
|Pageviews:||5.5 billion (average of Oct, Nov and Dec)|
|Employees:||990 (as of December 31, 2010)|
Top Investors and Shareholders
|Reid Hoffman and Michelle Yee:||19,066,032 shares, 21.4% ownership|
|Sequoia Capital:||16,840,309 shares, 18.9% ownership|
|Greylock Partners:||14,047,978 shares, 15.8% ownership|
|Bessemer Venture Partners:||4,578,253 shares, 5.1% ownership|
|Jeffrey Winer, CEO:||3,844,512 shares, 4.1% ownership|
|Steven Sordello, CFO:||1,007,327 shares, 1.1% ownership|
|Dipchand “Deep” Nishar, VP Product & User Experience:||970,000 shares, 1.1% ownership|