LinkedIn 2012 Annual Report Download - page 28

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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). Additionally, we compete against smaller companies
that focus on groups of professionals within a specific industry or vertical. Our competitors may announce
new products, services or enhancements that better address changing industry standards or the needs of
members and customers, such as mobile access. Any such increased competition could cause pricing
pressure, loss of market share or decreased member engagement, any of which could adversely affect our
business and operating results. Internet search engines could also change their methodologies in ways that
adversely affect our ability to optimize our page rankings within their search results.
Enterprises and Professional Organizations-Talent Solutions. With respect to our Talent Solutions, we
compete with established online recruiting companies, such as Monster, CareerBuilder, and Indeed.com,
talent management companies and larger companies that are focusing on talent management and human
resource services, such as Oracle (through its acquisition of Taleo), SAP (through its acquisition of
SuccessFactors) and IBM (through its acquisition of Kenexa), 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. If the efficiency and usefulness of
our products to enterprises and professional organizations do not continue to exceed those provided by
competitors, which factors are influenced by the number and engagement of our members, we will not be
able to compete successfully.
Enterprises and Professional Organizations-Marketing Solutions. With respect to our Marketing
Solutions, we compete with online and offline outlets that generate revenue from advertisers and
marketers. To the extent competitors are better able to provide customers with cost-effective access to
attractive demographics, either through new business models or increased user volume, we may not be
successful in retaining our existing advertisers or attracting new advertisers, and our business would be
harmed.
Finally, 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.
If we fail to effectively manage our growth, our business and operating results could be harmed.
We continue to experience rapid growth in our headcount and operations, which will continue to
place significant demands on our management and our operational and financial infrastructure. As of
December 31, 2012, approximately 46% of our employees had been with us for less than one year and
approximately 77% for less than two years. As we continue to grow, we must effectively integrate, develop
and motivate a large number of new employees in various countries around the world, and we must
maintain the beneficial aspects of our corporate culture. In particular, we intend to continue to make
substantial investments to expand our engineering, research and development, field sales, and general and
administrative organizations, and our international operations. To attract top talent, we have had to offer,
and believe we will need to continue to offer, highly competitive compensation packages before we can
validate the productivity of those employees. We face significant competition for talent from other
Internet and high-growth companies, which include both publicly traded and privately-held companies. As
we have transitioned from a private company to a public company, this competition has become even
more acute in assessing appropriate compensation packages, particularly, determining the mix of cash and
equity compensation. The risks of over-hiring (especially given overall macroeconomic risks) or
over-compensating and the challenges of integrating a rapidly growing employee base into our corporate
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