Analysis of LinkedIn

31th MAY 2013
2 LINKEDIN | SIX DEGREES OF SEPARATION
Index
Index ................................................................................................................................................... 2
A. Introduction ................................................................................................................................... 3
1. Presentation of the company......................................................................................................... 3
a. Basic characteristics .................................................................................................................... 3
b. History......................................................................................................................................... 3
c. Solutions | Services ..................................................................................................................... 4
d. Overall performance | Finance................................................................................................... 6
e. Overall performance | Website .................................................................................................. 7
2. Strategic analysis.......................................................................................................................... 11
a. Macroenvironment ................................................................................................................... 11
b. Megatrends............................................................................................................................... 14
c. Microenvironment..................................................................................................................... 14
i. SWOT...................................................................................................................................... 14
ii. Porter’s five forces analysis................................................................................................... 17
iii. Strategic group map ............................................................................................................. 20
d. Stakeholders expectations........................................................................................................ 21
3. Strategy formulation.................................................................................................................... 21
a. Mission statement..................................................................................................................... 21
b. Strategic goals ........................................................................................................................... 21
c. Business-level ............................................................................................................................ 23
d. Corporate level.......................................................................................................................... 23
4. Organizing for strategy................................................................................................................ 25
a. Strategy in action....................................................................................................................... 25
b. Key Success Factors................................................................................................................... 29
c. Future investment plans............................................................................................................ 31
d. Conclusions ............................................................................................................................... 31
References........................................................................................................................................ 32
Annex - Glossary............................................................................................................................... 33

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A. Introduction
The following report aims at presenting an overview of the company LinkedIn and its strategy,
starting with a general description of the market, providing figures and analysis of the context in
which it is acting and with a final conclusion and points to consider for the future.
1. Presentation of the company
a. Basic characteristics
LinkedIn [www.linkedin.com] is the world’s largest professional network service (PNS) website in
the world, with over 200 million users of more than 200 countries and territories and available in
over 15 languages, such as English, French or Spanish and over 3.700 employees around the world.
About half of the membership is from the United States (US) and 11 million are from Europe1
and
comes from over 170 different industries, including executives from all Fortune 500 companies.
Approximately two new members per second join the network, with 57 million added during
20122
and the traffic monthly is of 21,4 million visitors from U.S. and 47,6 globally.
Main competitors of LinkedIn are coming from Europe: Viadeo [www.viadeo.com], a French-
based-company, with more than 50 million users from 186 countries3
and XING [www.xing.com], a
German-based-company with 13 million users (half of them are from German-speaking countries)
from over 190 countries4
according to the company.
Individuals, enterprises and professional organizations might take different services provided from
LinkedIn in a free-of-charge basis or by paying a premium to get additional features.
b. History
Founded in December 2002 and launched on 5th May 2003
by Reid Hoffman, former CEO and current Chairman of the
Board, and colleagues coming from companies related to
online business as PayPal and SocialNet (Allen Blue, Eric Ly,
Jean-Luc Vaillant, Konstantin Guericke). LinkedIn was
developed under the idea that a network focus on business can connect the world’s professionals
to make them more productive and successful and providing them with better opportunities.
1
http://blog.linkedin.com/2013/01/09/linkedin-200-million/
2
http://investors.linkedin.com/annuals.cfm | “2012 Annual Report” [Accessed on 26th May 2013]
3
http://thenextweb.com/insider/2013/01/14/pealk-viadeo/
4
http://corporate.xing.com/no_cache/english/press/press-releases/details/article/press-releasebr-xing-ag-
xing-agm-agrees-to-pay/339/58e143b724ed430c990fab8e688bcb86/

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Additionally, it was based on the concept of Six degrees of separation, according to which
everyone is 6 or fewer steps away from any other person in the world via introduction. By that
meaning, “a friend of a friend” statements can be made, for example, to connect a fisherman from
China to a president of the United States Barack Obama.
Although LinkedIn’s growth during the first period of time was slow (6.000 users after the first
month and 37.000 after half a year of existence), after 2 years LinkedIn had a membership of
almost a million professionals worldwide. In 2005 it introduced its business lines: jobs and
subscriptions and launched a premium service for recruiters and researchers.
In January 2011 LinkedIn filed for an initial public offering and under the symbol of “LNKD” and
traded its first shares on May 19, 2011 on the New York Stock Exchange (‘‘NYSE’’).
c. Solutions | Services
As mentioned before, LinkedIn has free and monetized solutions, each one providing separated
specific services.
FREE SOLUTIONS
It is the option that users get free of charge and it is focus on expanding the professional
network. Connections across the network are classified into three degrees: first degree
connections are members who agree to connect, second degree connections are members who
share one or more mutual connections, and third degree connections are related via two
connections. Members can retrieve the contact information of their first degree connections and
browse their second and third degree connections in order to find additional opportunities.
FREE
SOLUTIONS
Function Examples
Manage
Professional
Identity
 Profile
 Skills/
Endorsement
Build and engage
with professional
networks
 Invitations
 People You
May Know
Access to
Knowledge, Insights
and Opportunities
 Groups
 SlideShare
Multi-platform
Access
 Mobile
 APIs5
5
API = Application Programming Interfaces. Used to build applications in the cloud computing market

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Manage Professional Identity =
| Profile | A user can create its own profile and fill it with personal information.
| Skills/Endorsement | There is an option available where members can add skills (from
hard skills such as knowledge of IT softwares to soft skills like team management) and others
can endorsed/recommend this person, assessing its veracity.
Build and engage with professional networks =
| Invitations | Members can send invitations to connect and expand their network. In
this case, 1st
degree contacts can invite each other. 2nd
degree contacts can be contacted
through messages, not invitations.
| People You May Know| Users receives a list of possible members they might know but
they are not in their current contact network.
Access to Knowledge, Insights and Opportunities =
| Groups |Members can join groups created with specific purposes and different topics,
such as “SGH students”, “German IT Consultants”, etc and create discussions.
| SlideShare| In SlideShare, users can upload presentations, reports or download them,
therefore, sharing files and information in general. SlideShare is a separate Webpage from
LinkedIn but it is an added service > www.slideshare.com.
Multi-platform access=
|Mobile| LinkedIn is available on cell phones through mobile applications, including iOS
for iPhone and iPad, Android, Blackberry, and Windows Mobile.
| API | It is possible to program applications that integrates services and content from
the website into another websites or platform. Additionally, the content and display of a profile
in LinkedIn can be modified using these tools.
MONETIZED SOLUTIONS
MONETIZED
SOLUTIONS
Solution Function Example
TALENT
SOLUTIONS
Find candidates
more easily
 Advanced Searches
 InMail
MARKETING
SOLUTIONS
Promote products
inside the network
 Display Ads
 Recommendation Ads
PREMIUM
SUBSCRIPTIONS
Organize
individual/company’s
profile better
 Sales Navigator
 Profile organizer

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Talent solutions:
Aims at companies being able to identify efficiently and acquire the right talent for their
needs. It is based on the idea that 80% of potential employees are passive job seekers. It aims at
recruiters and corporations, who want to create a corporate page, access LinkedIn’s database of
users and resumes and put ads targeted for those matching specific job profiles.
Marketing solutions:
Focuses on advertisers and it is designed to reach the most relevant audience with a
product through graphic or text link in LinkedIn.
Premium subscriptions:
Is directed to those who want to improve their profiles with more information, better
customization and gaining access to those in a company with decision-making-power as
sometimes the contact network might be very extend but not filled with the people the user needs
to address.
d. Overall performance | Finance
The following are indicators to see the performance of LinkedIn.
Net revenue | Profit
Variation from 2013 to 2014, calculated based on the Consensus Scenario of 2013.
Source: http://investing.businessweek.com/research/stocks/earnings/earnings.asp?ticker=LNKD
Overall, experts predict a prosper future for the company with net revenues climbing to $1,500
million in 2013 and $2,100 million in 2014.

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Share value | the highest and lowest value per quarter
Source: http://investors.linkedin.com/annuals.cfm | 2012 Annual Report
The initial value was $ 45 in May 2011 and nowadays the average is $ 1706
, reflecting positive
expectations from the industry in general.
e. Overall performance | Website
Distribution of members worldwide
6
http://investing.businessweek.com/research/stocks/earnings/earnings.asp?ticker=LNKD

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As presented before, LinkedIn has a stronger presence internationally than its main
competitors but there are still raising markets which can be better explored.
Stage of development – Product Life Cycle
Market share | Market Growth
Under “Others”, Tianji was included even though it’s presence is only in China but because it is part of the Viadeo Group, it might have
impact in the future in the global market
Source: based on own calculations | Traffic and users information from corporate websites and www.alexa.com
The market share according to number of users worldwide shows a favorable position
for the company.
LinkedIn;
74,86%
Viadeo;
16,63%
3,66%
Others;
4,85%
MARKET SHARE BY APRIL 2013 |
USERS-BASED

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Demographic characteristics of users
Source: http://www.globalrecruitingroundtable.com/2013/01/22/linkedin-facts-figures-2013/#.UaeZk9JSjOU [Accessed
on 30th of June 2013]
More than 50 million unique visitors each week
2.6 Billion pages viewed in one month (Traffic for Dec 20 2012 – Jan 18 2013)
1% of the addicts are responsible for 26% of all traffic
The average user spends 7 minutes and 22 seconds on the website
25% of all employee profiles views are from co-workers.
Three out of four users wants to be approached for other job opportunities.
Over 2.8 million businesses have a LinkedIn Company Page
Web Traffic Sources
Source: https://www.quantcast.com/linkedin.com [Accessed on 30th of June 2013]

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Traffic in the US | Social Networks + Professional Networks | To April 2013
Source: http://www.dreamgrow.com/top-10-social-networking-sites-by-market-share-of-visits-april-2013/ [Accessed on
30th of June 2013]
Although not the same category, this graph is included with the purpose of showing how overall
LinkedIn is gaining market share in the US even comparing it with more popular and massive
websites like Facebook and Youtube which have a bigger potential customer base.
Market growth
According to LinkedIn data, the number of customers grew by 16 million during the first quarter of
2013. It is representing a rate of more than 2 new registered users per second. Taking into
consideration the growth trends from the first quarter 2010 until the first quarter 2013, the
average growth rate is 9,5% per quarter. Considering these trends, it is possible to predict a 28%
growth in the number of users in 2013. This represents 60 million new users by the end of the
year and 262 million users in total.

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0,00%
2,00%
4,00%
6,00%
8,00%
10,00%
12,00%
14,00%
Q2'10
Q3'10
Q4'10
Q1'11
Q2'11
Q3'11
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Market Growth per
quarter 2010-2013 | %
Source: www.slideshare.net/linkedin/q1-2013-earnings [Accessed on 31th of June 2013]
2. Strategic analysis
a. Macroenvironment
POLITICAL
Governments are expressing their concern about privacy contents which could harm the
company strategy to use user’s information for delivering effective advertising and networking.
Additionally, there is a rising concern about the use of social networking technologies for illegal
conducts, such as the unauthorized spread of national security information, money laundering or
similar, can restrict or impose additional costs upon the conduct of the business or cause users to
leave the service.
Taxation issues are also important as the unclear nature of business (legislation and online
applications) can force the payment of double fiscal obligations.

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ECONOMIC
Fluctuations in the economy and market in general can affect the numbers of users seeking for
jobs, companies looking for candidates and both paying or not for premium solutions. Moreover,
depending on the season as well, each solution might be affected by it. Talent Solutions, related to
recruiting, might be more common while peak trends of recruitment, for example, the second
quarter of the year and Marketing Solutions can be highly requested during winter seasons when
people spend more time on the Internet.
There is also the currency exchange fluctuation as LinkedIn is entering international markets with
more depth and higher costs of doing business globally regarding places to rent, equipment, staff,
transaction costs, etc.
The possibility of joining the Stock Market to find new investors and additional resources is also
useful as the need of investing is constant and therefore, also limits the possibility to pay dividends
to investors more frequently.
SOCIAL
Users are feeling more comfortable of using online services to look for jobs but on the other
hand, feeling worried about privacy policies and its effectiveness.
Additionally, each country and cultural aspects related to work and selection processes are
different and what in one place might be acceptable might not be in another. For example, adding
a picture is obligatory in South American countries but in European countries, that is more like an
optional option.
There is also a tendency of requesting accessibility anytime, anywhere and this is where mobile
applications are also becoming a key factor for Internet services.
Overall, the public in general is getting more used to use networking services to satisfy their needs
(for example, e-business, e-procurement, etc).
TECHNOLOGICAL
The constant development of new technologies impacts the growth of the industry, as new
solutions and opportunities appears.
In the area of information security and data protection, most states have passed laws requiring
notification to users when there is a security breach for personal data, such as the 2002
amendment to California’s Information Practices Act and any future changes might affect how the
website is or can be programmed and with which informatics infrastructure.

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As the platform is growing in its’ membership and adding new services, upgrade of systems are
required while accommodating actual and anticipated changes in the service to overcome possible
capacity constraints.
There is also a dependency on Internet search engine’s methodologies (Google, Yahoo, etc) to
direct the traffic to LinkedIn.
Finally, if there are communication shutdowns and no access to internet, which depends on third
parties, nullifies efforts from LinkedIn.
ECOLOGICAL
About the ecological aspect, the tendency from Green initiatives can lead the usage of digital tools
instead of the physical printing of CVs for example.
Additionally, natural disasters or other catastrophic occurrences could interfere the access to the
serves of LinkedIn and therefore, making it inaccessible. US corporate offices are located in San
Francisco Bay Area and Southern California, both regions known for seismic activity and although
there is a disaster recovery program, it might take time for the service to being re-established.
LEGAL
Because of the wideness and not-well-defined field of application (international and “virtual-
online”), multiple jurisdictions or yet-to-define concepts are addressed. Additionally, laws
concerning labor agreements, privacy of data, acceptable marketing has to be taken considered.
Additionally, Intellectual property rights are important considering the know-how, applications
and programs developed for the website, and how easily an invention or concept can be replicated
on the Internet.
To control access to their proprietary technology, LinkedIn uses contractual agreements.
Confidentiality and invention assignment contracts are signed with employees and contractors,
and confidentiality agreements with third parties.
As LinkedIn is subject to a number of foreign and domestic laws and regulations that affect
companies conducting businesses online, many of which are still evolving and could be interpreted
in ways that could impact the business. In US and abroad, laws relating to the liability of providers
of online services for activities of their users and other third parties are currently being tested by a
number of claims, including actions based on invasion of privacy, unfair competition, copyright
and trademark infringement.

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There is also privacy and data protection laws, and their application to the Internet is unclear and
changeable according to country, region and security breaches, investigations and litigations
around this topic can impact strongly on the business. Connected to this, payments and flow of
money is done to pay for the services and an incorrect manipulation of data can lead to frauds or
other illegal acts which can result in fines and harm of the reputation of the company.
b. Megatrends
PNS adding SNS features and viceversa | Features
The addition from LinkedIn of features such as recommendations, groups, etc and on the other
hand, Facebook applications such as Branch-out (application with job-seeking-purposes) shows a
trend toward mutual “bench-marking” when applicable.
New services and options | Accesibility
PNSs are introducing mobile technology into their services in order to be accessible every time,
everywhere as a consequence of the number of people who access online services through devices
other than personal computers, including smart phones, handheld tablets and mobile telephones
has been increasing in the past few years and is projected to continue this line.
The latest purchase of the company Pulse by LinkedIn is a reflection of this.
Internalization |Less Glocalization
The less glocalized strategy from websites like Viadeo and XING reflects a tendency toward
addressing the global market as one, but placing additional features for users to customize its
content in case they need it. There are also more languages available in order to make members
from different part of the globe being connected in a single platform.
c. Microenvironment
i. SWOT
STRENGTHS
Sufficient financial resources to fund projects
Nowadays with over USD 320 million revenues per quarter, LinkedIn is not a small weak startup as
it was at the beginning. This is reflected on how they spent money on acquisitions such as
SlideSharE for USD119 million and Pulse (newsreader web and mobile) for USD 90 million. The

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company has financial resources to develop project from the inside and provide its users with new
services.
LinkedIn has a good reputation among professional networking site
In a study from ROI Research, 59 per cent of respondents say LinkedIn is their most important
account on social networks. Even during the recession at the job market in many countries, it is
one of the most common places for job seekers to find opportunities and the companies to find
candidates. 87% of members trust LinkedIn as a source of information affecting their decision-
making-process. Additionally, it is founded on the “word-of-mouth” marketing, as the company is
relying on its quality to attract new users and the addition of two new members per second is a
sign that shows confidence for the future. This is reflected on the 49% of members finding
LinkedIn to be a good source for “word-of-mouth” information on brand experiences.7
Diversified revenue streams
As it was mentioned above, LinkedIn has different sources of revenue from its different. This
provides flexibility and more future options to exploit.
First mover and leader in the market
Being the first comer to the market of professional networks and current leader places LinkedIn in
a favorable position to act and establish future trends.
International presence
LinkedIn has users all over the world and not only in specific regions, such as Viadeo and XING
mainly focus in Europe.
WEAKNESSES
Security vulnerability | Privacy issues
In 2012, a security breach and passwords of more than 6,5 million users were stolen and posted
online by hackers. Although this represented only 5% of total accounts, it was a warning for the
company and members as well and a request for action from LinkedIn concerns this topic.
Connected with this, privacy and data management of users is a key topic, as people places
personal information on the webpage trusting that this information is kept safe. LinkedIn did not
present solid anti-threat-security-measures on their servers at that time.
7
Acccording to PunchMedia Marketing Agency - http://www.slideshare.net/punchmedia/linkedin-statistics-2013

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Inadequate presentation for some industries
LinkedIn covers a wide range of professionals but it might not be adequate for some specific cases.
Niche professional networks such as DoctorsHangOut or Physpro for doctors or professions
related to art (actors, singers, etc) are examples who might not find their needs satisfied with this
service.
Cultural barriers + Weak presence outside the US specially in India and China
Each country has its cultural customs when it comes to work-related-issues. The composition of
the membership of Linkedin is a reflect of this as a half of them are from the US, then 25% of them
are from Europe, but emerging markets like India and China represent only 18% (2 million users
out of 200), a small acceptance rate comparing the population of these countries.
The website did not find the way to properly enter those markets and understand the culture.
OPPORTUNITIES
People from all over the world are potential members of PNS
Like mentioned before, two new members join the membership of LinkedIn every second and
every person who looking for a job, is a potential member.
Trend toward usage of Internet for everyday life
People are using Internet not only to search for information but also to do shopping/buy (E-
Procurement), do business (E-Business) and taking their “physical” life to virtual grounds.
Candidates are being analyzed and contacted through PNSs instead of being asked to send CVs
and Motivation Letters because of its simplicity and also the possibility of checking candidates’
background and corroborate references massively.
More active roles of companies on the Web
Companies are trying to attract users to their products and/or join their staffs by creating Brand
experiences based on both Conventional and Online Marketing. This allows PNSs to create new
opportunities and broaden its services.
Unexploited growing Asian market
Now three out of four users of LinkedIn are either from US or Europe, however by being the only
leading social media which is allowed in China company can use its potential and increase its share
in the country with a population of more than 1, 3 billion or the Indian market as well.

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THREATS
Dynamism of the industry and varied potential competitors
Online services are constantly changing and new entrants can emerge. As the area of competition
is interconnected with different markets possible rivals can include social networks, such as
Twitter, Facebook; professional networks like XING, Viadeo and Goldenline in Poland; or seemingly
unrelated companies for the IT industry, for example Microsoft. Applications such as BranchOut
(professional networking service on Facebook, founded in 2010, active in 60 counties and available
for more than 30 million users in 15 languages) presents potential threats for LinkedIn.
Those who does not use or are not interested in Online Services
Those who are outside the network, either because they are not interested in looking for a job, the
service or does not want to create profile, are potential candidates which might interest
companies in certain positions.
Possible unreliability of data
It is said that on Facebook, 83 out of 955 million social network users are fake. In LinkedIn, some
users might place references or skills which cannot be corroborated, inaccurate data or
inappropriate usage of the network by users who can use to for spamming can damage LinkedIn’s
reputation.
ii. Porter’s five forces analysis
Industry rivalry - Competition
 MODERATE
 Leadership among PNS | Wide variety of options | Dynamic market | Competitive
actions
Among other PNS, LinkedIn is the leader, far away from competitors like Viadeo and XING but that
leadership can rapidly change in a short period of time, because of how dynamic the market is,
and how fast customers preferences can change. Additional features, new services and the variety
of options provided by the company, both with free solutions and monetized solutions, offer users
different choices, and with that, attracts many different segments on the industry of professionals
[individuals, companies, marketing agencies, etc].
Both Viadeo and XING are planning on reformulating their strategies from “glocalization” to
“internationalization” as they realize how connected the global market is and that presence only in
Europe is acceptable but not enough in the future.

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Print Screen taken from Viadeo - www.viadeo.com [Accessed on 26
th
May 2013]
It is possible to see that the available languages are less than LinkedIn, showing a less
internationalized strategy and also focus on the European market but slowly changing toward an
more expansive campaign. For example, Viadeo announced in January 2013, the acquisition of
“Pealk”, a search service engine located in the US with the idea of an worldwide expansion8
.
Threat of new entrants
 MODERATE
 SNS’s economic of scale | Competitors from related markets | New players
Possible entrants can be from SNS such as Facebook, Twitter to job portals like Monster
(www.monster.com), customer relationship management market (www.salesforce.com) or even
companies involved in the IT market in general, for example Microsoft and its interest in Yammer
(recently launched PNS)9
.
Besides this, SNSs have the advantage that they manage a wider range of users and applications
(for example, Facebook has more than 400 million users) and they have more experience on facing
higher internet traffic (which can result in lower response from the webpage, lost of data, etc).
By adding new services, those possible entrants can take a share on the market, or creating
alliances, joining efforts with smaller companies already providing additional features and
therefore, although LinkedIn is very-well-positioned, and its approach of updating functions is
accurate, preventive measure are key.
Threat of substitute products or services
 MODERATE
 SNS | Job Search Engine - Online Job Services
Possible substitutes can include SNSs, depending on what the user wants or Online Job Services,
like mentioned inside the point “Threat of new entrants”. Networking can be done through
8
http://thenextweb.com/insider/2013/01/14/pealk-viadeo/
9
http://www.neowin.net/news/microsoft-shows-interest-in-buying-yammer

31th MAY 2013
LinkedIn, but also professionals might refer to Facebook, Twitter if they want to know about
opportunities in a company and they do not use or know PNSs. Online Marketing features can be
used both to position a company and also to attract new candidates and promote opportunities.
Picture of Facebook promoting a Job Opportunity | Combination Job Posting + SNS
Bargaining power of customers/buyers
 LOW-MODERATE
 No concentration | No switching costs | Undisputed leader
Customers are individuals, enterprises and professional organizations and are not concentrated.
Therefore, their power to bargain is low.
For example, no-individual-customer represented more than 10% of the net revenue.
On the other hand, because of how dynamics and swings are possible on businesses based on
professional/social networks, a good reputation is built slowly but a downturn can create an
instant negative reputation and a massive movement from users to other options. No innovation,
no adaptation to users’ changing needs can result in lost of market share. For example, the
website Myspace (www.myspace.com) was created in 2003, was the main leader in visits until
2007 but started a decline from 2008, compare to Facebook or Twitter to quote a few, because
they stuck in their “portal strategy” and did not add features to improve the “social-networking
experience”.
Additionally there are no switching costs and users can easily join other options. Fortunately for
the company, considering being the clear leader of the market, the viral effect makes more users
join the network, and giving more reasons to users to stay.
Overall, users might switch to competitors but LinkedIn provides good quality services (and
consequently, has good reputation), adds new features and responds to market needs, plus the
current membership support available, makes it well-positioned against this force.

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Bargaining power of suppliers
 LOW
 Many providers | Webpage programmed on Java10
On this type of industry, it is possible to find many options as service providers. Ranging from
data storage services to mobile and overall, new applications, the offer is vast. Purchase of
suppliers, for a wider range of services for users, is a common strategy and it is possible to refer to
the first acquisition of LinkedIn in 2010 of mspoke (later LinkedIn Recommendations) and
SlideShare in 2012 (still a separate webpage - www.slideshare.com) by $0.6 million and $119
million respectively. Additionally, as it is programmed on Java, it is easier to find programmers
compare to other languages such as PHP, which requires more complex maintenance.
Picture of LinkedIn Recommendations - Mspoke acquisition and it’s feature
Overall, the position of LinkedIn is solid, as it is the clear leader, there are no strong followers, it
has international presence and provides many services to attract different segments inside the
market of professionals looking for online features.
The characteristics of the industry makes difficult to differentiate competitors, substitutes and
potential new entrants as the example of SlideShare, which could have been acquired by
Facebook, Microsoft or even an Enterprise Resource Planning (ERP) company and might enter the
PNS market. Considering this, the approach of LinkedIn of buying suppliers, adding new services
and adapting the websites’ feature to each customers’ needs places then in a favorable position.
iii. Strategic group map
LinkedIn provides a wider range of products (3 different solutions)
in a broader geographical scope. In the future, it is expected a more
globalized strategy for the competitors while at the same time an
even wider product range from LinkedIn.
10
http://www.thebuzzmedia.com/linkedin-is-written-in-99-java/

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d. Stakeholders expectations
As stakeholders, the following were identified.
LinkedIn’s employees they expect stable growth of the company and development of their
professional career within the corporation. Customers expect more useful services worth paying
for and evolution of the existing ones. They want more people in the network to talk, collaborate,
employ and be employed. Shareholders expect growth of revenues, profits, price of shares and
number of dividends they get. They expect the company to go the right way and be guided by the
leaders with clear winning strategy. Creditors want stability as well, no decline and steady growth
of the corporation. Society and community wants improvement of the job situation and the
decrease of the level of unemployment which at some point depends on LinkedIn and its clients
(companies, their employees and other officials). Governments want decline of the people
unemployed in their countries as well. Competitors want to see LinkedIn as a weaker player at the
market of social networks.
3. Strategy formulation
a. Mission statement
Mission:
“Connect the world’s professionals to make them more productive and successful”
The priority is placed in current members inside the platform. Therefore, enable professionals to
achieve higher levels of performance and professional success and enable companies to find and
connect with the world’s best talent.
Vision:
“Create economic opportunity for every professional in the world”
This vision applies not only to current members but also to every professional in the global labor
force who has the ability to create economic opportunities for others as LinkedIn believes this is
the main power of its’ professional network.
b. Strategic goals
LinkedIn’s strategy is based on 3 main pillars11
and each is divided in 2 elements:
 Simplify
 Grow
 Everyday
11
http://investors.linkedin.com/annuals.cfm | “2012 Annual Report” [Accessed on 26th May 2013]

31th MAY 2013
Simplify
| “Be the Essential Source of Professional Insights” | “Foster Viral Member Growth”
Making the product easier for members in order to unlock value from core products and services.
During 2012, visual changes in the section “People You May Know”, the redesign of the Homepage
or even the new version of the LinkedIn Profile, the professional record of the member.
Considering also the extensive amount of traffic on Internet, LinkedIn aims at being the essential
source for relevant shared information.
Grow
| “Expand Our International Presence” |” Increase Monetization While Creating Value for Our Member”
Comprises two priorities:
1. expanding global membership
2. extending monetization efforts to benefit both members and customers.
The website is now available in 19 languages and there is an increasing tendency of subscriptions
outside the US during the last year.
About monetization, each solution was improved and overall it can be seen an improvement in
features related to access to the page through mobile services plus clearer value-addition for
Premium Subscribers such as a Sales Navigator for the Sales Solution, which makes easier how to
contact top-managers and those with decision-making power.
Everyday
|” Serve as the Professional Profile of Record” | “Work Wherever Our Members Work”
Delivering value to members everyday by helping them build out their professional identities and
gain valuable insights. The goal is for professionals to use the platform as the main professional
profile worldwide,. The introduction of “Endorsements” allowing members to better recognize the
skills of their colleagues is an example as well as the acquisition of SlideShare, allowing users to
upload and share presentations.

31th MAY 2013
c. Business-level
CULTURE
The company culture is intended to reflect who LinkedIn and their staff are and where the
company aspires to be.
Transformation. People who work at LinkedIn are there because they seek to make a positive and
lasting impact on the world, help realize the full potential of LinkedIn and fundamentally alter the
trajectory of their careers
Integrity. LinkedIn does not believe the ends justify the means. Rather, employees are expected to
do the right thing no matter what
Collaboration. Much like the network effects inherent in LinkedIn’s business model, the company
believes that as valuable as they are as individuals, they are all exponentially more valuable when
aligned and working together
Humor. Fulfilling LinkedIn’s mission and vision requires an intense focus, so the company believes
it is important to not take themselves too seriously and try to have some fun while doing it
Results. LinkedIn set clear, actionable goals and have high expectations for the company’s
performance, counting that employees consistently deliver excellent results, seek leverage
through greater efficiency and effectiveness, and demonstrate leadership at all levels
VALUES
“Our Members Come First”
“Relationships Matter”
“Be Open, Honest and Constructive”
“Demand Excellence”
“Take Intelligent Risks”
“Act Like an Owner”
d. Corporate level
LinkedIn’s strategic model is based on 3 elements:
1) International expansion: like it was presented on the point “Strategic goals”, LinkedIn acts in a
way to promote international expansion, through building offices outside US, more variety of
language availability and international sales force.

31th MAY 2013
2) Closed platform: the website is a closed platform in the sense of no links to other networking
sites are promoted. For example, SlideShare is handled as a separate place even though it
belongs to LinkedIn, keeping its specificities along. The needed information for users is inside
the page and embedded| displayed on it when necessary.
3) Pre-empt competitors: LinkedIn provides new services to avoid competitors (actual and
potential) to try to enter the market. Wall Street Journal and the information that is available
inside LinkedIn is similar to Facebook and its’ relation with USA Today.
REVENUES
Revenues are generated from the monetized Solutions mentioned before.
Talent Solutions: Revenues from providing access to the LinkedIn Recruiter comes from the
subscription period, which consists primarily of annual subscriptions that are billed monthly,
quarterly, or annually. The placement of job postings, which generally run for 30 days, is also a
source of incomes.
Marketing Solutions: The typical duration of advertising contracts is approximately two months.
Premium Subscriptions: Revenues come from selling services to customers allowing them to have
further features. Subscriptions are monthly or annual.
NET REVENUE BY PRODUCT
Overall, there was an increase in revenues on each product, especially from the Talent Solution.
Total net revenue increased $450.1 million in 2012 compared to 2011, representing an 86% more.
Net revenue from Talent Solutions increased $262.7 million as a result of further market
penetration of the product. On the other hand, net revenue from Marketing Solutions increased

31th MAY 2013
$102.4 million due to higher sales volume by the field sales and self-service advertising solutions,
as well as, higher average advertising prices. Additionally, the increase in sales volume is driven by
higher user engagement.
Net revenue from Premium Subscriptions increased $85.0 million as a result of an increase in the
number of premium subscribers due to increases in engagement of members.
4. Organizing for strategy
a. Strategy in action
3 ASSERTIONS INSIDE THE BUSINESS MODEL
There are 3 assertions which LinkedIn uses to deploy its strategy:
1) Professional Social Network is different from Social Network: although they might share
some characteristics, the purposes are different and professional wants to have a network for
specific business purposes and not a multi-service-platform with a chat, games, etc.
2) Hold on professional users: LinkedIn believes that the model will succeed as long as they keep
their basic and original idea of working only with professional users, because their needs are

31th MAY 2013
specific and it is a niche market (inside the social media market) which can be fully and
favorably exploited.
3) Corporations’ support: considering the 2 assertions before, if LinkedIn stands for the
professionals, corporations will support the concept and will invest money on it, as the
reputation and the number of members will be good enough to provide the results that
companies desires.
STRUCTURE
By 31th December 2012, LinkedIn had 3.458 employees, most of them in Engineering, Product
development and Operations.
Source: http://investors.linkedin.com/annuals.cfm | 2012 Annual Report
Therefore, the structure is focus on developing and maintenance of services and sales (although
Sales and Marketing are presented together, the main focus is on expanding sales internationally
with a stronger sales team).
INTERNAL POLICIES
LinkedIn encourages collaboration but at the same time embraces individual thinking and
creativity. As an example, one of the key approaches to attracting and retaining technical talent
and fostering continued innovation is through sponsored events like ‘‘InDays’’ and ‘hackdays’’
where employees are encouraged to create and implement new ideas. Participants then present
their ideas in front of the whole company with prizes awarded for the best ideas.
Engineering |
Product
development |
Operations
44%Sales and
Marketing
42%
Administrative
14%
SHARE OF EMPLOYEES BY FUNCTION

31th MAY 2013
SALES FORCE
Field sales organization uses a direct sales force to solicit customers and agencies. This offline
channel, mainly used for Talent and Marketing solutions, allows a longer sales cycle where price
can be negotiated, higher relative average selling prices and longer contract terms.
Online channels (through the website) are available mainly for Premium Subscriptions and
occasionally, for Marketing solutions.
MARKETING: Word-of-mouth advertising
The member grew virally based on members inviting other members to join the network and
therefore, marketing costs are low. Based on trusting the quality and services provides, the
company expects this raising tendency to continue, as the dynamism of the Internet allows so.
CUSTOMER’S SUPPORT [“Post-sales-service”]
Self-service support is available on the website and customers can also make enquiries via e-mail.
There is also a specific premium support for monetized users.
OPERATIONS
The main characteristic of the platform is being available constantly and for that, the website and
related infrastructure are hosted in multiple third-party facilities. In this way, in case of
technological problems (for example, slow-response, server maintenance issues, inaccessibility,
and threat to the database) it is possible to resource to back-ups. Equinix Operating Co., Inc is the
company responsible for this service since 2008.
WEBSITE PERFORMER AS A DRIVER
LinkedIn understands “Website performance” as the ability of users (regardless they are members
or not), enterprises and professional organizations in all geographies to access the website, service
and solutions within acceptable load times.
The company realizes that in some instances, they might not be able to identify the causes of
problems for accessing the website or it might become difficult to maintain and improve the
overall performance, especially peak usage times and when the solutions and services become
more complex. In case the service are unavailable when users need it, they may seek other
websites or services and that might affect the reputation of the company.

31th MAY 2013
Considering this scenario, LinkedIn aims at making investments to maintain and improve Website
performance while releasing new features. Because of this, a disaster recovery program was
implemented allowing moving production to a back-up data center.
TRADE SECRECY | Intellectual Property Rights
As mentioned in the Legal aspect in the PESTEL analysis, the importance of keeping inventions safe
and possible infringements of intellectual property, makes very important to keep track of this
issue.
It was already mentioned contract agreements with employees, contractors and third-parties.
Additionally, and under the US law, the trademark ‘‘LinkedIn’’ and the ‘‘in’’ design mark, as well
as others, and as of December 31, 2012, are under licenses issued in US patents related to online
networking, which expire between 2017 and 2029,and 124 patent applications on file in the
United States and internationally12
.
TECHNOLOGICAL INFRASTRUCTURE
Technological innovations are placed to make the service more efficient. The key technological
pillars are the following:
Professional Graph: graph engines are used in the webpage where nodes can represent
individuals, companies, schools and other entities and connect, follow another member, based
on the concept of Six-Degrees-of-Separation. The professional graph holds an individual’s real-
time network and enables establishing the degree by which two nodes are connected (for
example, 2nd degree vs. 3rd degree).
Open Sourced Technologies: the open source community is contacted to promote ideas and
help increase the speed at which the technology can mature. The combination of open source
and proprietary technologies used increases the speed at which productions of scale can be
achieved. To quote a case, Hadoop is an open source project used to batch compute data for
different features from the website and that enables massive calculations.
Search: multiple searches on real time based on key words in many languages is available to
allow interconnections among members.
Customized Content, Matching, Targeting and Recommendations. LinkedIn developed its own
recommendation engine by combining the technologies coming from Professional Graphs and
12

31th MAY 2013
Search engines. Based on a member’s profile, their 2nd and 3rd degree connections, their
viewing and clicking history, and a host of other criteria, our algorithms can provide intelligence
and recommendations around People You May Know, Groups You May Like, etc.
POSITION IN THE MARKET
GRAND STRATEGY MATRIX ANSOFF MATRIX
LinkedIn is ahead of its competitors as it is providing new services, reaching more users
internationally and creating a bigger professional network than the rest. It is also understanding
the importance of being available everywhere, especially with the raising of usage from users of
mobile applications and also differentiating customers inside the PNS market as a whole, with the
Talent Solutions, Marketing Solutions and Premium Subscriptions and making profits based on
them while at the same time attracting users with free services which, on the other hand,
represents a bigger membership and stronger presence on the Web.
b. Key Success Factors
The following are Key Success Factors from LinkedIn:
Number of Registered Members: number of individual users who have created a member
profile on the website. The company believes is a key indicator of the growth of the
network and reflects how successfully services and solutions offered to professionals have
attracted new members. LinkedIn realizes than registered members are different from
actual members (due to falsification, etc) but still considers it a valid metric.
2012 2011 2010
Number of registered
members* 201.912 144.974 90.437
*in thousands

31th MAY 2013
Change in % 2011-2012 = 39%
Change in % 2010-2011 = 60%
Unique visitors: users who have visited the website at least once during a month
regardless of whether they are a member, based on data provided by comScore, (provider
of digital marketing intelligence). For the company, this measure shows the growth in
brand awareness among users and whether useful products and services are provided,
thereby increasing engagement of members and that increasing the sales of the
monetized Solutions.
2012 2011 2010
Unique visitors* 126 84 52
*in millions
| SlideShare is also considered in these numbers
Change in % 2011-2012 = 50%
Change in % 2010-2011 = 62%
Page views: number of pages on the website that users view. Similar to unique visitors, it
is an indicator for gaining insight about members engagement and effective-value-delivery
of the services provided.
2012 2011 2010
Page views* 38.258 29.420 18.059
*in millions
| SlideShare is also considered in these numbers
Change in % 2011-2012 = 30%
Change in % 2010-2011 = 63%
Number of LinkedIn Corporate Solutions Customers: number of enterprises and
professional organizations that are under active contracts for Talent Solutions. This
indicator shows the market penetration in the online recruiting market, the productivity of
the field sales organization and the value that these products bring to large and small
enterprises and professional organizations.
2012 2011 2010
Number of LinkedIn Corporate
Solutions Customers 16.409 9.236 3.865
Change in % 2011-2012 = 78%
Change in % 2010-2011 = 139%

31th MAY 2013
Sales Channel Mix: Talent and Marketing Solutions can be sold offline through LinkedIn’s
field sales organization or online through the website. The majority of Premium
Subscriptions are sold online. The offline channel is characterized by a longer sales cycle
where price can be negotiated, higher relative average selling prices, longer contract
terms and higher selling expenses.
In USD 2012 2011 2010
Field sales / offline 552.459 287.634 135.691
Online sales 419.850 234.555 107.408
c. Future investment plans
Resources and future investment plans will be focused on:
 technology infrastructure: architecture, availability, performance, security, as well as disaster
recovery measures
 product development, to provide new features for members
 sales and marketing, including an expansion of the field of sales organization
 international expansion in an effort to increase members base, engagement and sales
 general administration, including legal and accounting expenses related to being a public
company with an expanding global presence
d. Conclusions
As it is in a newly and developing market, LinkedIn has the chance of keeping a rate of growth but
for that, they should consider the following points while operation:
 Ability to increase member base and member engagement
 Adaptation to user’s needs and accessibility issues (for example, Mobile accessibility)
 Ability to deal with changes in the availability of the website (how it is called by LinkedIn
“Website Performance”)
 Protection against security breaches and how to deal with personal information
In % 2012 2011 2010
Field sales / offline 57% 55% 56%
Online sales 43% 45% 44%

31th MAY 2013
 The unproven nature of the market and how fast the company can reach to it
 Seasonability and fluctuations in demand, related to industries around each Solution
 The entrance of new competitors, joint ventures, alliances, etc
 Macroeconomic changes such as the deterioration of the labor market
 Strong management of legal issues (Intellectual Property Rights | Interpretation of laws
concerning fields related to LinkedIn’s activities)
LinkedIn is currently placed in a favorable position, and its strategy of international expansion,
plus the addition of new services through acquisitions and investments in internal projects is the
appropriate one as the market is rapidly changing and users are always requesting more features
from this type of services.
References
 Angwin D., Cummings S., Smith C. (2007). The Strategy Pathfinder, Blackwell Publishing.
 Grant R. M. (2005). Contemporary Strategy Analysis, Blackwell Publishing.
 Faulkner D., Campbell A. (2006).The Oxford Handbook of Strategy, Oxford University Press.
 Porter M., Competitive Advantage, The Free Press, 1985
 http://files.shareholder.com/downloads/ABEA-69T44N/2497626622x0x665814/6F886EB6-
2C01-4284-B43D-8684D46046FE/LinkedIn_2012_10-
K_Annual_Report_bannerless_PDF_for_posting_.PDF
 http://investors.linkedin.com/annuals.cfm | “2012 Annual Report” [Accessed on 26th May
2013]
 http://thenextweb.com/insider/2013/05/05/linkedin-10-years-social-network/
 http://www.slideshare.net/ctnconsulting/linkedins-history-present-and-recent-
features#btnPrevious
 http://corporate.viadeo.com/en/about-us/the-group/
 http://corporate.XING.com/no_cache/english/press/press-releases/details/article/press-
releasebrXING-passes-6-million-member-mar/
 http://www.reuters.com/article/2013/05/02/us-linkedin-results-idUSBRE94114K20130502
 http://theundercoverrecruiter.com/why-linkedin-more-important-facebook-or-twitter/
 http://news.cnet.com/8301-1009_3-57448079-83/millions-of-linkedin-passwords-reportedly-
leaked-online/
 http://www.trefis.com/stock/lnkd/articles/82455/growing-small-businesses-can-boost-
linkedins-top-line-but-stock-is-still-rich/2011-11-28
 http://en.wikipedia.org/wiki/LinkedIn
 http://www.globalrecruitingroundtable.com/2013/01/22/linkedin-facts-figures-
2013/#.UaeZk9JSjOU
 http://venturebeat.com/2013/04/17/linkedin-mobile-web-breakup/
 http://www.slideshare.net/punchmedia/linkedin-statistics-2013

31th MAY 2013
Annex - Glossary
App: applications; services which provides new features
Embedded: a display of webpage inside another, so there is no need to go to the original site
Mobile: any device that allow users to access Internet (Tablet, cell phone, etc)
PNS: Professional Network Service. Social Network with business-orientated-goals
SNS: Social Network Service. A social network. For example, Facebook
Traffic: number of users, frequency, etc of a webpage

Analysis of LinkedIn

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Analysis of LinkedIn