LinkedIn 2012 Annual Report Download - page 55

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income, or in two separate but consecutive statements. In December 2011, the requirement regarding the
presentation of reclassification adjustments out of accumulated other comprehensive income was deferred
indefinitely. We adopted this authoritative guidance in our interim period March 31, 2012.
Results of Operations
The following tables set forth our results of operations for the periods presented as a percentage of
net revenue for those periods. The period-to-period comparison of financial results is not necessarily
indicative of future results.
Year Ended
December 31,
2012 2011 2010
(as a percentage of
revenue)
Consolidated Statements of Operations Data:(1)
Net revenue ........................................ 100% 100% 100%
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization
shown separately below) ............................ 13 16 18
Sales and marketing ................................. 33 32 24
Product development ................................ 26 25 27
General and administrative ............................ 13 14 14
Depreciation and amortization ......................... 8 8 8
Total costs and expenses ............................ 94 95 92
Income from operations ................................ 6 5 8
Other income (expense), net ............................ — (1) —
Income before income taxes ............................. 6 4 8
Provision for income taxes .............................. 4 2 1
Net income ......................................... 2% 2% 6%
(1) Certain items may not total due to rounding.
Net Revenue
We generate revenue from Talent Solutions, Marketing Solutions and Premium Subscriptions.
Talent Solutions. During the third quarter of 2012, we renamed our Hiring Solutions product line to
Talent Solutions to better reflect the value we bring to our customers. Revenue from Talent Solutions is
derived primarily from providing access to the LinkedIn Recruiter product and job postings. We provide
access to our professional database of both active and passive job candidates with LinkedIn Recruiter,
which allows corporate recruiting teams to identify candidates based on industry, job function, geography,
experience/education, and other specifications. Revenue from providing access to the LinkedIn Recruiter
product is recognized ratably over the subscription period, which consists primarily of annual subscriptions
that are billed monthly, quarterly, or annually. We also earn revenue from the placement of job postings
on our website, which generally run for 30 days. Independent recruiters can pay to post job openings that
are accessible through job searches or targeted job matches. Revenue from job postings is recognized as
the posting is displayed or the contract period, whichever is shorter.
Marketing Solutions. Revenue from Marketing Solutions is earned from the display of advertisements
(both graphic and text link) on our website primarily based on a cost per advertisement model. Revenue
53