LinkedIn 2013 Annual Report Download - page 34

The results of regulatory proceedings, litigation, claims and audits cannot be predicted with certainty,
and determining reserves for pending litigation and other legal, regulatory and audit matters requires
significant judgment. There can be no assurance that our expectations will prove correct, and even if these
matters are not resolved in our favor or without significant cash settlements, these matters, and the time
and resources necessary to litigate or, resolve them, could harm our business, our operating results, our
reputation or the market price of our Class A common stock.
If we do not continue to attract new customers, or if existing customers do not renew their subscriptions, renew
on less favorable terms, or fail to purchase additional solutions, we may not achieve our revenue projections, and
our operating results would be harmed.
In order to grow our business, we must continually attract new customers, sell additional solutions to
existing customers and reduce the level of non-renewals in our business. Our ability to do so depends in
large part on the success of our sales and marketing efforts. We do not typically enter into long-term
contracts with our customers, and even when we do, they can generally terminate their relationship with
us. We have limited historical data with respect to rates of customer renewals, upgrades and expansions,
so we may not accurately predict future trends for any of these metrics. Furthermore, the nature of our
products and solutions is such that customers may decide to terminate or not renew their agreements with
us without causing significant disruptions to their own businesses.
We must demonstrate that our Talent Solutions are an important recruiting tool for enterprises and
professional organizations and that our Marketing Solutions provide them with access to an audience of
one of the most influential, affluent and highly educated audiences on the Internet. However, potential
customers may not be familiar with our solutions or may prefer other more traditional products and
services for their talent, advertising and marketing needs.
The rate at which we expand our customer base or increase our customers’ renewal rates may decline
or fluctuate because of several factors, including the prices of our solutions, the prices of products and
services offered by our competitors, reduced hiring by our customers or reductions in their talent or
marketing spending levels due to macroeconomic or other factors and the efficacy and cost-effectiveness
of our solutions. If we do not attract new customers or if our customers do not renew their agreements
for our solutions, renew on less favorable terms, or do not purchase additional functionality or offerings,
our revenue may grow more slowly than expected or decline.
Ultimately, attracting new customers and retaining existing customers requires that we continue to
provide high quality solutions that our customers value. In particular, our Talent Solutions customers will
discontinue their purchases of our solutions if we fail to effectively connect them with the talent they seek,
and our premium subscribers will discontinue their subscriptions if they do not find the networking and
business opportunities that they value. Similarly, customers of our Marketing Solutions will not continue
to do business with us if their advertisements do not reach their intended audiences. Therefore we must
continue to demonstrate to our customers that using our Marketing Solutions is the most effective and
cost-efficient way to maximize their results. Even if our Marketing Solutions are providing value to our
customers, advertisers are sensitive to general economic downturns and reductions in consumer spending,
among other events and trends, which generally results in reduced advertising expenditures and could
adversely affect sales of our Marketing Solutions. Finally, we are in the early stages of developing our
sales solutions products which may not be successful. If we fail to provide high quality solutions and
convince customers of our value proposition, we may not be able to retain existing customers or attract
new customers, which would harm our business and operating results.
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