LinkedIn Raises Nearly $13 Million More

It’s time to start keeping count of profitable companies raising additional “just in case” funds.
I think I’ve seen at least 3 this month.

LinkedIn rocks but $250m seems exceptional. If it really was $250m, why stop at $12.8? Might as well raise $20 or $30m … odd size round (5%) esp. when most VCs want to own 10-20% depending on stage … Bessemer in for 3%? hmm …

The company is on IPO track now, it’s easier for venture firms to take a smaller piece just to get in the door. Very low risk.

So essentially they earned a tiny bit more than $1.00 per registrant… and they have 70 employees to pay for all that ‘gain’. To me, they are like the eToys of 2.0. I know it’s the ‘hot’ thing right now with the elite, but it seems as though there should be a joke there and I’m not let in on the punchline. Does the value derive from the fact it’s mostly upper class people who you can sell RobbReport style merch to or does it come from something else? I don’t know, that site just seems like a loser to me. I don’t get it.

Doesn’t matter what the rev per registrant is as long as they have a profit generating business model and are growing by leaps and bounds. They may not have been first to market, but they are certainly showing how it can be done and will most certainly have a very successful IPO.

xing - 3.5 million? Either they are in the spam industry, or they are making numbers up..

Quite frankly I feel that if LinkedIn is the best social network out there for professionals, the company should feel threatened to the entry of competitors.

In the MarketWatch article linked above, the VP of biz development of LinkedIn mentioned that he does not feel threatened by Facebook because he feels that Facebook users will graduate into LinkedIn. I don’t see this happening.

Facebook already has professional networks to become associated with. Why should people leave behind their friends on Facebook when they can just switch associations from colleges/universities to corporations/companies? I already see tons of people just switching associations and this is just a small feature implemented into Facebook.

I definitely feel that the entire UI of LinkedIn could be improved to cater to a younger generation of working class. Perhaps this $13 million should be used to do so.

On the other hand, the reason I like LinkedIn is that it has no other social media aspects associated with it (granted I’ve never used Facebook). I don’t see networking with friends and professional networking living side by side.

Amit, I’d say you are definitely wrong. All the younger guys from my fraternity recently graduated and they have all slowly begun to sign up for LinkedIn even though they are all on Facebook. LinkedIn is doing just fine and they don’t need to make any changes.

I don’t see Facebook as a competitor. In terms of connecting with other professionals, you can’t beat LinkedIn at this point. Unfortunately Amit, you are assuming that all the people you want to network with in the professional world are on Facebook. There are a considerable number of people that are too old to have used Facebook, and quite frankly those people are a lot more “useful” as professional connections than people who just graduated within the past couple of years.

When used as an active resource, Linked in is great. People who signup and do nothing will receive little value from the service. I have been a member of ryze.com for a long time, and Linked is just blowing past it.

I think LinkedIn is hot. I am not surprised at the kind of valuations that are being speculated for it. $10M in reveune is way too small for the public markets. They are better off remaining private. My guess is that LinkedIn will be acquired by one of the big guys, Yahoo, MS, AOL (perhaps by Yahoo?).

i use linkedin. Its not that great; I don’t get it.

LinkedIn is the most consistent performer of the professional networking sites I’ve used. I just hope that it can integrate deeply with Plaxo one day.

I never thought linkedin was this good. However it is a niche social network which is meant to be the next big thing

Remember, LinkedIn is worth whatever someone is willing to pay for it. Sure its book value may be way less than $250M, but the PR value to non-web2.0 VC’s makes it an easy marketing decision for them if nothing else, especially if the amount is only a few million to be able to put LinkedIn on one’s portfolio page, or home page for that matter. I am sure they need the capital, because profitability is a very loosely spoken word. Most early stage and cash-flow positive companies face monthly/quarterly cash-flow problems building market share. To grow and stay ahead of the pack, LinkedIn needs to scale quickly and adapt its services to the rapidly changing landscape. Higher value offerings are headed our way, and if they are easier to use and more powerful, that could present market share challenges for the company. Should be interesting to see where it goes. As for a take-out, LinkedIn’s latest round/value has just added more “reasons” for why the price of a said acquisition has to be that much higher than what is reasonable. Yes, LinkedIn may *believe* it is worth $250M based on those term sheets that have floated by them, but nothing is real to a buyer, at least until you accept one of them. That is what sets your new negotiating position for an exit. Welcome to the dance.

Watchout LinkedIn; Facebook is coming.

Yes, new facebook

i don’t know what it is with linkedin - if they’re operating profitably then well done to them i say; securing more funding to be more aggressive/for ipo progression may not be an entirely successful gambit, however …. i see grave shortcomings in its positioning and branding and i do not see that it offers anything in the way of “added value” let alone an enriching end-user experience to encourage general surfing thereof.

the school of ugly web apps needs questioning - eg, ebay, myspace, linkedin.

In my opinion LinkedIn is a nice example of social networking website connecting business people, but really how many people time have you used it to Recruit your staff. Guy Kawasaki said it as a joke too in this video:

http://www.veotag.com/player/?.....4637e7b736

To an extent that I have never got any substantial leads or business from it compared to Ecademy.com (UK based Business Networking website)

Does any one seem to have the same problem

It find it funny in the fact that Peter Thiel (co-founder of Paypal) is one of the angel investors in LinkIn and sits on the Board of Directors for Facebook (as in the comments above, may or may not be a fierce competitor). So for every major/ minor business decision LinkIn makes, you’ll have a competitor peering in with your decisions and secrets per say.

We have been using LinkedIn for a while, but I have noticed there is a bit of professional competition which keeps people using the site.

We have have used LinkedIn to find contacts in Pennsylvania and we’re in Sydney.

Xing didn’t went public in December 2006, it just got a new name. The network was previously known as OpenBC and is very popular in Europe. Otherwise having a revenue this large so soon would be very impressive

http://ifyoucandreamityoucando.....-linkedin/

Everyone I have contacted through LinkedIn has responded in a professional manner; limited bs to deal with as a member.

Unlike Mybloglog, which grows your number of connections far too easily resulting in a directory of users more than anything else (limited social value), the majority of LinkedIn members have “real” contacts listed (people they know, and a much higher social networking value).

LinkedIn is also good for “Capture Managers” and other business development pros conducting research on competitors. It is easy to connect with former employees of almost any company. Glad to hear they are getting additional funding.

Has anyone ever heard of Doostang.com?

I’m a big LinkedIn fan but $0 - $10 million in 4 years with $15 million in capital isn’t exactly a home run, especially when you’re as connected as the founding team is.

The valuation is probably accurate considering their leadership position, but I’m a little concerned about the lack of revenue growth.

Unfortunately, like any other social network, the users with a large network of contacts don’t actually know 99% of them. The system is easily gamed. Several months back, Linkedin tried to put a stop to these “super networks” (that often reached 30,000+ members) by limiting the number of contacts to be displayed as “500+”. So, I would argue, that the value comes from being able to reach many contacts at once….not necessarily that the contacts are “real” contacts that people know.

Another hurdle that I’d like to see LinkedIn overcome is the lack of “stickiness” to the site. Once you build a decent network and find a contact or two, there isn’t much of an incentive for the majority of users to come back to the site. I’ve used the site for quite a while and receive invites almost daily….but, never really have a compelling reason to return and actually use the site.

On track for an IPO? Awesome… I want to see more startups take this route, rather than build a simple widget and hope to be acquired for $1B by YahGoogSoft.

LinkedIn is a good resource, but is it worth that much. Maybe to a recruitment network, but time will tell

What is the world do they have 70 freaking employees doing. Complete waste of cash if you ask me.

More funding, more growth,
More Prosperity, More Economic Development,
And improved QOL.

http://www.tekno-world.blogspot.com

LinkedIn Answers is a “huge success”? Really?

LinkedIn does a lot of things right. Unfortunately they also do a few things wrong. They would greatly benefit by making their public profiles more information-heavy. When a non-Linkedin user finds a LinkedIn profile via Google, the information displayed is still very anemic and not helpful at all. The searcher is then pretty much forced to create a LinkedIn account to get more information. This is a deal-killer for a pretty high percentage of people.

They also need to provide an API to their data so that others can build tools on top of it. There are literally thousands of little niche markets that could benefit from LinkedIn’s professional data without taking anything away from LinkedIn. If they truly want to become the leader in professional business data from a perople/information perspective they really need to open up their database with at least a basic read-only API functionality. If they do not do this one of their competitors will and LinkedIn will suddenly find their lunch has been eaten.

Note: Facebook has an API.

On a side note, has anyone used or benefited from LinkedIn’s recently launched Service Provider recommendation feature?

TC covered this new feature (launched in Oct. 2006) here: http://www.techcrunch.com/2006.....endations/

When I first heard about the feature I thought it presented a test to see if Linkedin could venture beyond the core fortune 500 / recruiter / technology and consulting space.

Any experiences from users would be great.

Thanks.

Seems like a phat valuation to me too, especially when you consider how people use the site. I mean I don’t have user activity metrics, but from my experience LinkedIn is something you’re on a few times a month (at most). There must be a core group of users who account for most of the page views, but I bet that’s closer to 10% than 20% or even 15% of registered users. So a few hundred thousand to 1/2 million core users = $250 million valuation? They better be growing that core group pretty damn fast is all I gotta say! Cheers!

-Chris Comella, Founder
BuzzPal - The World Is Your Party
http://www.buzzpal.com

I had this site confused with http://www.linkeldn.com I think thats what is …i’m confused!

Here is how my view of LinkedIn has changed dramatically in the past year:

- When I was first invited to LinkedIn about a year ago by a somewhat distant friend of a friend, I dismissed it as I didn’t know much about it, and figured it was some other facebook/myspace/friendster type site. I am in my mid 30s and hadn’t had more than a sample page with 1-2 friends on those sites.

- As it grew in popularity, I eventually joined on and grew my network. It seemed like an OK site, but still seemed as more of a competition to see who had the most work friends.

- All that changed when I got laid off in October. Suddenly it became a BUSINESS TOOL for networking, and I found it extremely valuable. Not only did I get an interview by using a contact from an old college buddy within my network that I hadn’t talked to in 10 years, but I was able to research the background of the people I would be interviewing with — and subsequently a fantastic job within 60 days.

Not sure how it will all play out, but I am certainly keeping up and expanding my network. I think it has a good chance.

LinkedIn is mainly used by job seekers and professional recruiters as a business tool. This is the population of users that are paying to use the application and enabling LinkedIn to become profitable.

From what I remember of Xing (OpenBC), they have a different revenue model from LinkedIn. Where LinkedIn has options for pay-as-you go or a high monthly fee, Xing has a very low monthly fee (something like 5 euros). This enables Xing to have a higher percentage of paying users, extending the paying user population past just recruiters and job seekers.

I used linkedin like crazy to connect with old friends from university. That was great. Unfortunately I haven’t used it since I formed a core network of contacts. I do know that one source of revenue for the company is recruiters, hedge funds, investment banks, etc. Unfortunately I don’t see much use for it anymore.

I don’t really get it either … in theory I like the concept. It has never helped me professionally and I’m in the software development field.

Perhaps my skills just suck But seriously, I would have expected to get a few bites or some help from that site. My profile is flagged as open to opportunities and I’ve recently “completed” my profile.

Given the high level backing behind LinkedIn, it is very likely to keep going up and up.

http://www.biziv.com/linkedin-.....g-for-13m/

To those not understanding the Xing hype: Xing is VERY popular for german business pros, where they started with the openBC name. You can signup for free, but if you really want to use it regularly you need the premium membership for 6,95 euro (app. 8.50 US$) / month and 17% of their membership base is premium. Xing is much more community based and strong on community aspects. I don’t know anyone from germany who likes linkedin as Xing has more features with active forums, profiles, photos.

They just rebranded as XING a few weeks before they went public on the Frankfurt Stock exchange in december, so their figures are solid and not a 250 million that linkedin would love to be traded at.

http://www.xing.com/go/invita/53124

Xing seems to be a more rich and user friendly svc than Linkdin, yet both sites imo, are privacy nightmares waiting to happen. This is especially the case with Xing where the user base–largely European, seem to have a very laissez-faire attitude when it comes to displaying personal info.

It’s only a matter of time before someone with criminal intent starts mining both sites for data…

The high valuation seems reasonable given (a) the audience of it’s high-end users vs. typical MySpace users, and (b) the real value that Linked In delivers to professionals and companies trying to recruit employees, get introductions to potential partners/customers, or expand networks. While it certainly could benefit from some usability improvements, as a tool it is highly useful.