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LinkedIn<br />“From the day we launched, LinkedIn has been about helping professionals build and maintain trusted relationships online.”- Reid Hoffmann, founding CEO<br />GROUP 3<br />

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Online Networking Communities<br />Social Network: (SNS) An online community that allows users to construct a profile, create a personal network, search, invite and communicate with other users.<br /><ul><li>Privacy Controls

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Degrees of separation

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Basic vs. Premium Membership</li></ul>Social Networking Explained<br />Professional Network: (PNS) A variation on the SNS model that was built around business rather than personal relationships.<br /><ul><li>Differed in content, communication style, and nature

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Member profiles, classified ads, message boards</li></li></ul><li>Company Overview<br />“LinkedIn will be the leader in business networking. It’s a productivity tool, used for professional people search, reference check, recruiting, finding experts and getting expert advice, and workgroup collaboration.” – Dan Nye<br />Company Vision based on 3 assertions<br />1) The Web 2.0 PNS would remain highly differentiated from the SNS, as seen with Web 1.0<br />2) Maintain a hold on professional users for positive and negative reasons<br />3) Corporations will support LinkedIn’s PNS model<br />

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History<br />2002: LinkedIn began in Reid Hoffman’s living room<br />2003: Officially founded May 5, 2003 (Cinco de LinkedIn)<br /> The 5 founders invited 350 of their closest contacts to join<br /> Ends the year with 81,000 members and 14 employees<br />2004: Ends the year with 1.6 million members and 33 employees; International members represent about half of all members<br />2005: LinkedIn launches its first premium service, subscription service and ends the year with 4 million members<br />

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History<br />2006: Members can be kept up to do date through added newsfeed<br /> Ends the year with 8 million members<br />2007: Launches LinkedIn Answers, Intelligent Application Platform, news product, profile pictures and corporate blog<br /> Dan Nye made CEO<br /> Customer Service Location opens<br /> Membership surpasses 15 million<br />2008: Recruiter product launches and creates buzz in HR depts<br /> Mobile phone app launches<br /> LinkedIn partners with CNBC and The New York Times<br /> Ends with 33 million members<br />

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Competitors<br />

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Competitors<br />SNS<br />Orkut <br /><ul><li> High usage numbers in Asian and Latin American markets

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Small usage in Europe and North America

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Recently introduced some PNS features</li></ul>Plaxco<br /><ul><li> Pioneer for calendar and address book sharing

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Comcast acquired in May 2008 to integrate into its </li></ul> Internet unit<br />

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Competitors<br />MySpace<br /><ul><li> World's leading SNS with 117 million users worldwide as </li></ul> ofmid 2008<br /><ul><li> 12% of all time spent by users on the Internet

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Promoted user creativity and autonomy, attracted teens

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Extremely profitable

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Tie between The Wall Street Journal and MySpace could</li></ul>pose threat <br />Facebook<br /><ul><li> More than 350 million users today (young professionals)

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User base and platform made potential serious competitor in PNS market, social marketing

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Corporate pages, networking tabs </li></li></ul><li>Competitors<br />PNS<br />XING<br /><ul><li>"the LinkedIn of Europe"

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Strong presence in Germany, Austria, and Switzerland

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Differed by giving open access to other members

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Perceived as only modest threat because of its limited market share and lack of U.S. presence</li></ul>Monster<br /><ul><li>World's largest job search engine

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Subscription fees per month led to tension between core businesses

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Did not serve professionals not actively searching</li></li></ul><li>Competitors<br />Specialized Professional Networks<br /><ul><li>Vertical-specific populations

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Minimal threat due to different scope

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Markets could be served through applications inside LinkedIn platform</li></ul> <br />Microsoft<br /><ul><li>TownSquare enterprise social networking

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Document editing and personnel updates

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Similar to Facebook page</li></li></ul><li>Strategy<br />Founded to make professionals more effective<br /><ul><li>Productivity

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Strongly differentiated from SNS

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Target "passive" candidates</li></ul> Revenue Streams<br /><ul><li>Advertising

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Subscriptions

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Job Postings

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Corporate Solutions-passive candidates

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Primary Research-Serve institutions through connections</li></li></ul><li>Strategy<br />International Expansion<br /><ul><li>Difficult to overcome cultural barriers</li></ul>Closed Platform ("Walled Garden")<br /><ul><li>No link between other networking sites, networking activity controlled

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Presents dilemma as users seek expanded features</li></ul>Add some SNS features to pre-emt efforts by Facebook to enter PNS market<br /><ul><li>WSJ to LinkedIn as Facebook is to USA Today</li></li></ul><li>Porters Five Forces<br /><ul><li> Rivalry Between Competitors

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Threat of Substitutes

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Threat of New Entrants

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Bargaining Power of Buyers</li></ul>- Bargaining Power of Suppliers<br />

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Industry Rivalry<br /><ul><li> Competition in the industry is moderate to high </li></ul> -Have to not only compete with other PNS, but also SNS<br /> -Majority of new users come from invitations from existing users<br /> -MySpace, Orkut, Plaxo, Facebook, XING<br /> -If LinkedIn opens up its platform, it would increase competition <br /> -There is not much product differentiation<br /> -Industry concentration is low<br />

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Threat of Substitutes<br /><ul><li> Threat of Substitutes is moderate</li></ul>Monster <br /> Used primarily for people searching for jobs, not networking<br />Microsoft<br /> Had look and feel of a Facebook page<br />Specialized Professional Networks: CIOZone, MedicalMingle, etc. <br />In the future we believe the threat of substitutes and industry rivalry will increase as large companies venture into this industry<br />

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Threat of New Entrants<br /><ul><li> Threat of New Entrants is Moderate/High – YASNS</li></ul> -SNS’s have economies of scope over LinkedIn<br /> -Switching costs decrease the threat of new entrants<br /> -Introducing versions in different languages decreases the threat of new entrants from other countries<br /> -Microsoft bought a portion of Facebook, which increases possibility of Facebook emerging into the PNS industry<br /> -MySpace and Wall Street Journal are now owned <br /> by the same person<br />

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Bargaining Power of Buyers<br /><ul><li> Bargaining Power of Buyers is Moderate/Low</li></ul> -LinkedIn is the largest PNS in the world<br /> -Buyer group is not concentrated<br /> -High concentration in PNS industry<br /> -Advertising that blends with core identity<br /> -Not many switching costs<br />( We did not analyze the bargaining power of suppliers because it is not relevant to a website)<br />

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SWOT Analysis: Strengths<br /><ul><li>Sufficient investments to fund its projects

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LinkedIn as a premier, trusted professional networking site

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Corporate Intranet Offerings

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Knowledge Management

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Diversified revenue streams

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Premium Accounts

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Advertisements

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Job Postings

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Ability to watch expansion trends in different regions

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Broad scope of professionals

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Not limited to just doctors, just lawyers</li></ul> <br />

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SWOT Analysis: Strengths<br />30% user generated<br />50% self-promoting<br />

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SWOT Analysis: Weaknesses<br /><ul><li>Limited access to all members

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Platform openness creates cultural divide

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Asia and formal introductions

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Unique Visitors of LinkedIn among social networking sites is very low

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2% of facebook users, use LinkedIn

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40% of LinkedIn users, use facebook

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Low Time Spent per Session per User

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LinkedIn: 6.5 minutes/day

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facebook: 55+ minutes/day</li></li></ul><li>SWOT Analysis: Opportunities<br /><ul><li>Moving beyond the “walled garden”

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Leveraging social applications on other sites

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Ability to capture the Asian market

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Desire for social media to enhance the professional experience

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Professional videos, lectures

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photo album sharing from trainings and conferences

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Young professionals attitude towards "referral marketing"</li></ul> <br />

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SWOT Analysis: Threats<br /><ul><li>Facebook

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Clean interface with the potential to bridge the gap between something very social yet professional

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Expectations of young professionals

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less boundaries between work and social life

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XING’s access to Asia

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Alienating both companies and individuals, by targeting both</li></ul> <br />

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SWOT Analysis<br />

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SWOT Analysis: Offensive<br /><ul><li>When STRENGTH meets OPPORTUNITY

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Strength: User Generated Advertisements

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Opportunity: Positive young professional attitude towards "refferal marketing"</li></ul>Referral Marketing: LinkedIn already uses user-generated ads, and can capitalize on their effectiveness as more and more young professionals come from the facebook generation.<br />

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SWOT Analysis: Defensive<br /><ul><li>When WEAKNESS meets OPPORTUNITY

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Weakness: Platform openness creates cultural divide

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Opportunity: Ability to capture the Asian market</li></ul>Must keep a close eye on competition: XING. And turn weaknesses into strengths. Adapt to the needs of the Asian market.<br />

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SWOT Analysis: Adjust<br /><ul><li>When STRENGTH meets THREAT

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Strength: Ability to watch global expansion trends internally

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Threat: XING and other PNSs targeting the Asian market</li></ul>Use this strength to track the rate of Asian expansionon LinkedIn and make adjustments to compete head on.<br />

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Strategic Dilemmas<br /><ul><li>Platform Type

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Adding Social Aspects

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Global Expansion

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Timing of Decisions</li></ul>Where does LinkedIn fit?<br />

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Open or Closed Platform<br /><ul><li>Current proprietary system closed to members

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“Walled Garden”

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Controls/monetizes users’ activity

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No “customer service problem” today

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Ex: Facebook

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Option to open platform to users/developers

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Industry analysts view

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Prior industries

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Ex: Google

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Middle Ground

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DataPortability Work Group

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RSS feeds</li></ul>--NOT URGENT--<br />

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Recommendation<br /><ul><li>Utilize real option to delay decision

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Lack of urgency

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Dependency

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Technology advances

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Other firms’ decisions

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Maintain middle ground

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RSS feeds/other opportunities

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Creates favorable positioning

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Uncertainty

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Customer service strength </li></li></ul><li>Adding Social Aspects<br /><ul><li>Maintain focus on strictly professional

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Demographics

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Income, age, career

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Add social networking features

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Fading social / professional distinctions

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Corporate America acceptance

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Increase time/visit</li></ul>--URGENT--<br />

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Recommendation<br /><ul><li>Remain professionally focused

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Maintain identity and loyalty to target market

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Business first attitude

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Slowly incorporate social features

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Subtle yet useful

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Strict acceptance policies

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WSJ of online networking</li></li></ul><li>Global Expansion<br /><ul><li>Doubling of non-U.S. membership in 2007

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Strong base

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English language

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U.S. Market

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June 2008 - 150 countries

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Western World/India vs. Asian market

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Plan to introduce other language versions late 2008</li></li></ul><li>Recommendation<br /><ul><li>Strive forward globally

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Millions of professional worldwide

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Streamline vital languages

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Multinational Corporations

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Asian market

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Business practice differences yield issues

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Discreet / private

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Emerging economies

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Approach tentatively yet opportunistic

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Challenge competitors

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Foreign and domestic</li></li></ul><li>Timing<br /><ul><li>Global financial crisis

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High unemployment

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Recovery?

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Growth of college graduates and professionals

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First mover vs. second mover

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Actions of Google, FB

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Flexible AND focused </li></li></ul><li>Recent News<br />2009: LinkedIn launches the Grad Guide, to help graduating students in today’s economy<br /> Celebrates 6th birthday with 600 cupcakes and 40 million members<br /> Jeff Weiner named as new CEO<br /> Closed platform opened up to developers at large<br /> Around 50 million members to date<br />