LinkedIn 2013 Annual Report Download - page 54

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Solutions include LinkedIn Recruiter, Job Slots, LinkedIn Recruitment Media and LinkedIn Career
Pages, which are all part of Talent Solutions. We believe the number of LinkedIn Corporate
Solutions customers is a key indicator of our market penetration in the online recruiting market,
the productivity of our field sales organization and the value that our products bring to both large
and small enterprises and professional organizations. The number of customers subscribing to our
LinkedIn Corporate Solutions product is particularly important to monitor given that we expect
revenue from LinkedIn Corporate Solutions to continue to represent a significant portion of our
total net revenue, and we are significantly investing in our ability to successfully sell this unique
product in a new and rapidly evolving market.
The following table presents the number of LinkedIn Corporate Solutions customers as of the periods
presented:
December 31, December 31,
2013 2012 % Change 2012 2011 % Change
LinkedIn Corporate Solutions customers ....... 24,444 16,409 49% 16,409 9,236 78%
The number of LinkedIn Corporate Solutions customers increased by 49% in 2013 compared to 2012,
and by 78% in 2012 compared to 2011. During these periods, we experienced an increase in net revenue
from sales of our Talent Solutions, both in terms of absolute net revenue and as a percentage of our total
net revenue (as further described in ‘‘Results of Operations’’ below), which was, and continues to be,
largely driven by increases in the number of our customers that have purchased our LinkedIn Corporate
Solutions products.
•Sales Channel Mix. Depending on the specific product, we sell our Talent Solutions and Marketing
Solutions offline through our field sales organization or online on our website. The vast majority of
our Premium Subscriptions are sold through our website. Our field sales organization uses a direct
sales force to solicit customers and agencies. This offline channel is characterized by a longer sales
cycle where price can be negotiated, higher relative average selling prices, longer contract terms,
higher selling expenses and a longer cash collection cycle compared to our online channel.
Our online sales channel allows members to purchase solutions directly on our website. Members can
purchase Premium Subscriptions as well as certain lower priced products in our Talent Solutions and
Marketing Solutions, such as job postings and self-service advertising. This channel is characterized by
lower average selling prices and higher cancellations compared to our offline channel, lower selling costs
due to our automated payments platform and a highly liquid collection cycle.
The following table presents our net revenue by field sales and online sales:
Year Ended December 31,
2013 2012 2011
($ in thousands)
Field sales ............................... $ 891,458 58% $552,459 57% $287,634 55%
Online sales ............................. 637,087 42% 419,850 43% 234,555 45%
$1,528,545 100% $972,309 100% $522,189 100%
Adjusted EBITDA
To provide investors with additional information regarding our financial results, we have disclosed
within this Annual Report on Form 10-K adjusted EBITDA, a non-GAAP financial measure. We have
provided a reconciliation below of adjusted EBITDA to net income, the most directly comparable GAAP
financial measure.
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