LinkedIn 2013 Annual Report Download - page 28

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business lines may not grow at the same rate. As with 2013, our philosophy in 2014 is to continue to
invest for future growth. We expect to continue to expend substantial financial and other resources on:
• our technology infrastructure, including architecture, development tools scalability, availability,
performance and security, as well as disaster recovery measures;
• product development, including investments in our product development team and the development
of new features for both members and customers, including those for mobile use and our sales
solutions products;
• sales and marketing, including a significant expansion of our field sales organization;
• international expansion in an effort to increase our member base, engagement and sales;
• general administration, including legal and accounting expenses related to being a public company
with an expanding global presence; and
• capital expenditures, including facilities.
These investments may not result in increased revenue or growth in our business, and will increase our
expenses. Even if our revenue continues to increase, we expect that due to increased expenses, in
particular, stock-based compensation, depreciation and amortization and provision for income taxes, we
may incur a GAAP loss during future periods, including the first quarter of 2014. If we fail to continue to
grow our revenue and overall business, our operating results and business would be harmed.
We expect to face increasing competition in the market for online professional networks from social networking
sites and Internet search companies, among others, as well as continued competition for customers of our Talent
Solutions and Marketing Solutions.
We face significant competition in all aspects of our business, and we expect such competition to
increase, particularly in the market for online professional networks and engagement of professionals.
Our industry is evolving rapidly and is becoming increasingly competitive. Larger and more
established companies may focus on our market and could directly compete with us. Smaller companies,
including application developers, could also launch new products and services that compete with us and
that could gain market acceptance quickly. We also expect our existing competitors in the markets for
Talent Solutions and Marketing Solutions to continue to focus on these areas. A number of these
companies may have greater resources than us, which may enable them to compete more effectively.
Specifically, we are investing significantly in our Marketing Solutions products with respect to mobile
solutions, and we may not be successful in generating revenue through advertising on mobile devices,
especially as compared to our competitors. Additionally, users of social networks may choose to use, or
increase their use of, those networks for professional purposes, which may result in those users decreasing
or eliminating their use of LinkedIn. Companies that currently focus on social networking could also
expand their focus to professionals. We and other companies have historically established alliances and
relationships with some of these companies to allow broader exposure to users and access to data on the
Internet. We may also, in the future, establish alliances or relationships with other competitors or
potential competitors. To the extent companies terminate such relationships and establish alliances and
relationships with others, our business could be harmed. Specifically, we compete for members, enterprises
and professional organizations as discussed below.
Members-professional networks. The market for online professional networks is new and rapidly
evolving. Other companies such as Facebook, Google, Microsoft and Twitter are developing or could
develop competing solutions. Further, some of these companies are partnering with third parties to offer
products and services that could compete with ours. We face competition from a number of smaller
companies in international markets, such as Xing in German-speaking regions and Viadeo in France, that
provide online professional networking solutions, as well as Internet companies in the customer
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