LinkedIn 2012 Annual Report Download - page 35

their websites receiving a higher search result page ranking than ours, or Internet search engines could
revise their methodologies in an attempt to improve their search results, which could adversely affect the
placement of our search result page ranking. If search engine companies modify their search algorithms in
ways that are detrimental to our new user growth or in ways that make it harder for our members to use
our website, or if our competitors’ SEO efforts are more successful than ours, overall growth in our
member base could slow, member engagement could decrease, and we could lose existing members. These
modifications may be prompted by search engine companies entering the online professional networking
market or aligning with competitors. Our website has experienced fluctuations in search result rankings in
the past, and we anticipate similar fluctuations in the future. Any reduction in the number of users
directed to our websites would harm our business and operating results.
Our business depends on continued and unimpeded access to the Internet by us and our members on personal
computers and mobile devices. If government regulations relating to the Internet or other areas of our business
change or Internet access providers are able to block, degrade, or charge for access to certain of our products
and services, we could incur additional expenses and the loss of members and customers.
Our products and services depend on the ability of our members and customers to access the Internet
through their personal computers and mobile devices. Currently, this access is provided by companies that
have significant market power in the broadband and internet access marketplace, including incumbent
telephone companies, cable companies, mobile communications companies, and government-owned service
providers, any of whom could take actions that degrade, disrupt, or increase the cost of user access to our
products or solutions, which would, in turn, negatively impact our business. Further, the adoption of any
laws or regulations that adversely affect the growth, popularity or use of the Internet, including laws
limiting Internet neutrality, could decrease the demand for our subscription service or the usage of our
services and increase our cost of doing business.
Our growth depends in part on the success of our strategic relationships with third parties.
We anticipate that we will continue to depend on relationships with various third parties, including
technology and content providers to grow our business. Identifying, negotiating and maintaining
relationships with third parties requires significant time and resources, as does integrating third-party
content and technology. Our agreements with technology and content providers and similar third parties
are typically non-exclusive and do not prohibit them from working with our competitors or from offering
competing services. Our competitors may be effective in providing incentives to these parties to favor their
solutions or may prevent us from developing strategic relationships with these parties. In addition, these
third parties may not perform as expected under our agreements with them, and we have had, and may in
the future have, disagreements or disputes with these parties, which could negatively affect our brand and
reputation. It is possible that these third parties may not be able to devote the resources we expect to the
relationship or they may terminate their relationships with us. Further, as users increasingly access our
services through mobile devices, we are becoming more dependent on the distribution of our mobile
applications through third parties, and we may not be able to access their application program interfaces.
If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to
compete in the marketplace or to grow our business could be impaired, and our operating results would
suffer. Even if we are successful, these relationships may not result in improved operating results.
If currency exchange rates fluctuate substantially in the future, the results of our operations, which are reported
in U.S. dollars, could be adversely affected.
As we continue to expand our international operations, we become more exposed to the effects of
fluctuations in currency exchange rates. We incur expenses for employee compensation and other
operating expenses at our non-U.S. locations in the local currency, and accept payment from customers in
currencies other than the U.S. dollar. Since we conduct business in currencies other than U.S. dollars but
report our financial results in U.S. dollars, we face exposure to fluctuations in currency exchange rates.
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