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Strategic case analysis of the firm LinkedIn

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  1. 1. This presentation is a research project from students at San Francisco State University and is intended for educational purposes only, any other uses are strictly prohibited.
  2. 2. Agenda <ul><li>What is LinkedIn? </li></ul><ul><li>Company background </li></ul><ul><li>Current business model </li></ul><ul><li>Competitors </li></ul><ul><li>Sustaining success </li></ul><ul><li>Summary </li></ul>
  3. 3. What is LinkedIn? <ul><li>LinkedIn is a networking tool that enables people to establish, manage and build their professional network. </li></ul><ul><li>Most powerful networking company in the world </li></ul><ul><li>Scalable revenue model and clear vision for future growth </li></ul><ul><li>Represent the gold standard of web 2.0 business </li></ul>Logged out homepage screenshot
  4. 4. History of Growth <ul><li>Founded Dec. 2002, launched May 2003 </li></ul><ul><li>Current market reach continues to grow (see below) </li></ul>Unique Visitors only counts a user once no matter how many times they visit the site in a given month—this is the industry standard for measuring a website popularity Source:
  5. 5. Reid Hoffman <ul><li>Reid Hoffman, Chairman and CEO </li></ul><ul><li>▫ Chairman, CEO and Co-founder of </li></ul><ul><li>▫ Previously Executive Vice President of </li></ul><ul><li>▫ Background in management & technology </li></ul><ul><li>Known as.. </li></ul><ul><li>“ The most connected man in Silicon Valley” </li></ul><ul><li>(which is practically/statistically true) </li></ul>Reid is also involved with other successful start-ups, including;
  6. 6. Management Team <ul><li>Steve Sordello, CFO </li></ul><ul><li>Previously served as Tivo, Inc.’s CFO </li></ul><ul><li>Was also CFO for AskJeeves, heading a turnaround strategy to turn the company profitable again. </li></ul><ul><li>Jean-Luc Vaillant, CTO </li></ul><ul><li>Co-founder of LinkedIn </li></ul><ul><li>Previously was Director of Engineering for Logitech </li></ul><ul><li>Jeff Weiner, President </li></ul><ul><li>Oversees all day-to-day operations </li></ul><ul><li>Over 14 years of experience as an internet executive </li></ul><ul><li>Most recently spent seven years as Executive Vice President of Yahoo! Network Division </li></ul><ul><li>Kevin Eyres, Managing Director - Europe </li></ul><ul><li>Responsible for leading company strategy and growth </li></ul><ul><li>Has experience internationally as European Managing Director of SideStep and GM of AltaVista International </li></ul>
  7. 7. Vision & Mission <ul><ul><li>Vision </li></ul></ul><ul><ul><li>Become the new global medium for how business gets done. </li></ul></ul><ul><ul><li>Mission </li></ul></ul><ul><ul><li>Connect the world’s professionals to accelerate their success. </li></ul></ul>
  8. 8. Revenue Model <ul><ul><li>1) Advertising Fees- </li></ul></ul><ul><ul><ul><li>4 basic advertising options for simple, clean and professional ads </li></ul></ul></ul><ul><ul><ul><li>Reach target customers directly </li></ul></ul></ul><ul><ul><ul><li>Cohesive with the ‘User Experience’ by avoiding flashy/irritating ads </li></ul></ul></ul><ul><ul><li>2) Premium Membership Fees- </li></ul></ul><ul><ul><ul><li>Generated from membership fees for upgrade accounts </li></ul></ul></ul><ul><ul><ul><li>Additional services for professionals to improve productivity </li></ul></ul></ul><ul><ul><ul><li>*These features are useful for marketing professionals, head hunters, etc </li></ul></ul></ul>LinkedIn revenue model is based on 2 revenue streams , which include:
  9. 9. Revenue Model (cont) Membership ‘feature matrix’ screenshot
  10. 10. Industry Analysis <ul><li>Professional Networking Site Industry (PNS) </li></ul><ul><li>LI is the gold standard for professional networking </li></ul><ul><ul><li>Their current industry position in the broader SNS industry </li></ul></ul><ul><li>Social Networking Site Industry (SNS) characteristics </li></ul><ul><ul><li>Target markets slow to adopt </li></ul></ul><ul><ul><li>Hyper-Competition </li></ul></ul><ul><ul><li>Perpetual Innovation </li></ul></ul><ul><ul><li>Rapid technological developments </li></ul></ul>
  11. 11. Competitor Analysis <ul><li>Direct Competitors </li></ul><ul><li>Indirect Competitors (numerous) </li></ul>
  12. 12. Market Analysis <ul><li>Target User Characteristics </li></ul><ul><li>Mostly males </li></ul><ul><li>Age 40 (approx) </li></ul><ul><li>No kids </li></ul><ul><li>Income $100k+ </li></ul><ul><li>High Education level </li></ul><ul><li>California/New York </li></ul>Sample User Profile
  13. 13. Company Growth <ul><li>Company </li></ul><ul><ul><li>33 employers to 345 as of January 2009 </li></ul></ul><ul><ul><li>Memberships have more than doubled, surpassing 38 million users as of March 2009 </li></ul></ul><ul><ul><li>Projected Growth for 2011 (below) </li></ul></ul>
  14. 14. Company Growth Membership Statistics Property Average Age Average HHI %Comp Co Size <100 % Comp Business Decision Makers % Comp That Read Business Magazine Last 30 Days LinkedIn 41 $109,703 26% 49% 29% 48 $101,701 18% 40% 45% 47 $93,896 18% 38% 47% 48 $95,668 18% 42% 51%
  15. 15. Company Growth
  16. 16. Company Growth <ul><li>Added Services: Building value proposition to Users </li></ul><ul><ul><li>LinkedIn Jobs </li></ul></ul><ul><ul><li>LinkedIn Mobile </li></ul></ul><ul><ul><li>Featured Apps: </li></ul></ul>iPhone App screenshot
  17. 17. Company Growth <ul><li>International expansion </li></ul><ul><ul><li>- Roughly half of the members are </li></ul></ul><ul><ul><li>international users </li></ul></ul><ul><li>Currently available in six </li></ul><ul><li>languages – Chinese, English, </li></ul><ul><li>French, German, Japanese, </li></ul><ul><li>and Spanish </li></ul><ul><li> Interest in LinkedIn by search volume </li></ul>Interest in LinkedIn by search volume
  18. 18. Company Growth <ul><li>Investments </li></ul><ul><ul><li>Sequoia saw potential growth in LinkedIn and invested 4.7 million dollars in May 2003. </li></ul></ul><ul><ul><li>Other important investors include; </li></ul></ul>
  19. 19. Marketing <ul><li>LinkedIn uses three main forms of marketing: </li></ul><ul><li>Search Engine Optimization (SEO) </li></ul><ul><ul><li>Optimizing search results in search engines through carefully selected keywords and being connected to other high-traffic websites. </li></ul></ul><ul><li>Viral Marketing </li></ul><ul><ul><li>Offering free web-based services and products as a means of encouraging individuals to create exposure for LinkedIn. </li></ul></ul><ul><li>Word-of-Mouth </li></ul><ul><ul><li>Exposure created through the personal experiences and knowledge of individuals. </li></ul></ul>
  20. 20. Value added <ul><ul><li>LinkedIn also offers vital services that enhance their overall product: </li></ul></ul><ul><ul><li>LinkedIn Polls </li></ul></ul><ul><ul><li>LinkedIn Answers </li></ul></ul><ul><ul><li>Applications to create synergistic interactions </li></ul></ul><ul><ul><ul><li>One-stop connection to blogs, business websites, online calendars, and events. </li></ul></ul></ul>
  21. 21. Closing <ul><li>Young market with large growth potential </li></ul><ul><li>Sustainable business model </li></ul><ul><li>Unique product offering </li></ul>
  22. 22. Thank you for your time! For additional info regarding this presentation, please contact Adam Pastana-- [email_address] This presentation is a research project from students at San Francisco State University and is intended for educational purposed only, any other uses are strictly prohibited.