LinkedIn 2011 Annual Report Download - page 16

Download and view the complete annual report

Please find page 16 of the 2011 LinkedIn annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

Companies in the Internet, social media technology and other industries may own large numbers of patents,
copyrights, and trademarks and may frequently request license agreements, threaten litigation, or file suit against
us based on allegations of infringement or other violations of intellectual property rights. From time to time, we
face, and we expect to face in the future, allegations that we have infringed the trademarks, copyrights, patents
and other intellectual property rights of third parties, including our competitors and non-practicing entities. As
we face increasing competition and as our business grows, we will likely face more claims of infringement.
Competition
We face significant competition in all aspects of our business. Specifically, we compete for members,
enterprises and professional organizations; the bases upon which we compete differ among these areas as
discussed below.
•Members—Professional Networks. The market for online professional networks is new and rapidly
evolving. Other companies such as Facebook, Google, Microsoft and Twitter are developing or could
develop competing solutions. Further, some of these companies are partnering with third parties to
offer products and services that could compete with ours. We face competition from a number of
smaller companies in international markets, such as Xing in Germany and Viadeo in France, that
provide online professional networking solutions, as well as Internet companies in the customer
relationship management market, such as salesforce.com (Chatter and Jigsaw). Because membership
on our website is available at no cost, we don’t compete for members on the basis of price. Instead, we
compete primarily on the basis of the value and relevance of the products for professionals, ease of use
and availability of our website and our products and solutions, and the total number of professional
members and relevant data available.
•Enterprises and Professional Organizations—Hiring Solutions. With respect to our hiring solutions,
we compete with established online recruiting companies such as Monster+HotJobs, CareerBuilder and
Indeed.com, talent management companies, such as Taleo (which recently announced an agreement to
be acquired by Oracle), and traditional recruiting firms. Additionally, other companies, including
newcomers to the recruiting industry, may partner with internet companies, including social
networking companies, to provide services that compete with our solutions, either on their own or as
third party applications, such as BranchOut. In this area, we compete primarily on the basis of the
efficiency and usefulness of our solutions for enterprises and professional organizations, which are
influenced by the number and engagement of our members.
•Enterprises and Professional Organizations—Advertising and Marketing. With respect to our
marketing solutions, we compete with online and offline outlets that generate revenue from advertisers
and marketers. In this area, we compete to attract and retain advertisers by giving them access to the
most relevant and targeted audiences for their products or services.
Other companies that provide content for professionals could develop more compelling offerings that
compete with our premium subscriptions and adversely impact our ability to sell and renew subscriptions to our
members. Additionally, companies that currently focus primarily on social networking could expand into
professional networking or users of social networks could choose to use, or increase the use of, those networks
for professional networking.
We believe that we have competitive strengths that position us favorably in our markets. However, our
industry is evolving rapidly and is becoming increasingly competitive. Larger and more established companies
may focus on professional networking and could directly compete with us. Smaller companies could also launch
new products and services that we do not offer and that could gain market acceptance quickly.
Government Regulation
We are subject to a number of foreign and domestic laws and regulations that affect companies conducting
business on the Internet, many of which are still evolving and could be interpreted in ways that could harm our
-12-