LinkedIn 2013 Annual Report Download - page 39

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 made and will continue to make acquisitions to add employees, complementary companies,
products, or technologies. 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.
Risks Related to Our Class A Common Stock
The dual class structure of our common stock as contained in our charter documents has the effect of
concentrating voting control with those stockholders who held our stock prior to our initial public offering,
including our founders and our executive officers, employees and directors and their affiliates, and limiting our
other stockholders’ ability to influence corporate matters.
Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per
share. Stockholders who hold shares of Class B common stock, including our founders, and our executive
officers, employees and directors and their affiliates, together held approximately 62.4% of the voting
power of our outstanding capital stock as of December 31, 2013. Our co-founder and Chair, Reid
Hoffman, held approximately 13.0% of our outstanding shares of Class A and Class B common stock,
representing approximately 57.0% of the voting power of our outstanding capital stock as of December 31,
2013. Mr. Hoffman has significant influence over the management and affairs of the company and over all
matters requiring stockholder approval, including election of directors and significant corporate
transactions, such as a merger or other sale of our company or its assets. Mr. Hoffman will continue to
have significant influence over these matters for the foreseeable future.
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