LinkedIn 2012 Annual Report Download - page 37

products or enhance our existing solutions, improve our operating infrastructure or acquire
complementary businesses and technologies. Accordingly, we may engage in equity or debt financings to
secure additional funds. If we raise additional funds through future issuances of equity or convertible debt
securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue
could have rights, preferences and privileges superior to those of holders of our Class A common stock.
Any debt financing we secure in the future could involve restrictive covenants relating to our capital
raising activities and other financial and operational matters, which may make it more difficult for us to
obtain additional capital and to pursue business opportunities, including potential acquisitions. We may
not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain
adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to
support our business growth and to respond to business challenges could be significantly impaired, and
our business may be harmed.
Acquisitions and investments could result in operating difficulties, dilution, and other harmful consequences that
may adversely impact our business and results of operations.
We have acquired several private companies in the last few years. While these acquisitions were
primarily to acquire talent and technology, we may engage in larger acquisitions in the future and these
transactions could be material to our financial condition and results of operations. We also expect to
continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions.
The process of integrating an acquired company, business, or technology has created, and will continue to
create, unforeseen operating difficulties and expenditures. The areas where we face risks include:
• loss of key employees of the acquired company and other challenges associated with integrating
new employees into our culture;
• diversion of management time and focus from operating our business to acquisition integration
challenges;
• implementation or remediation of controls, procedures, and policies at the acquired company;
• integration of the acquired company’s accounting, human resource, and other administrative
systems, and coordination of product, engineering, and sales and marketing function;
• assumption of contractual obligations that contain terms that are not beneficial to us, require us to
license or waive intellectual property rights or increase our risk for liability;
• failure to successfully further develop the acquired technology; and
• liability for activities of the acquired company before the acquisition, including patent and
trademark infringement claims, violations of laws, commercial disputes, tax liabilities, and other
known and unknown liabilities.
These risks or other problems encountered in connection with our acquisitions and investments could
cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated
liabilities, and adversely affect our business generally.
Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of
debt, contingent liabilities, or amortization expenses, or write-offs of goodwill, any of which could harm
our financial condition. Also, the anticipated benefit of many of our acquisitions may not materialize.
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