Saturday, February 05, 2011

LinkedIn is Going Public

On Thursday, January 27, LinkedIn formally announced that it was planning on going public by filing an S-1 form with the U.S. Securities and Exchange Commission. So, "Why is this a big deal?" you might ask. Well, this is the one of the first times that the business networking site has turned over any real detailed facts about its financial affairs.

"We believe we are transforming the way people work by connecting talent with opportunity at massive scale," LinkedIn explained in its filing. "Our goal is to provide a global platform capable of mapping every professional's experience, skills, and other relevant professional data to his or her professional graph, including connections with colleagues and business contacts."

While LinkedIn has been in business, they have actually managed to make some money. They have done this via the combination of advertising and business services. The net revenue for LinkedIn during the first nine months of 2009 was around $80 million with a profit of only $3.4 million. In that same period of time in 2010, LinkedIn was able to pull in a net revenue of $161 million and made a profit of $10 million. The company was able to more than double their profits in a year. That’s crazy!

LinkedIn is not only increasing their profitability, but also the number of registered members that it can now brag about. Last year, the total number of registered LinkedIn users reached 55 million, but this year it has increased to more than 90 million. This was a statistic that the formerly very private company was very open and vocal about. In the company’s S-1 filing, they were open about the fact that although these numbers show the number of registered members of LinkedIn that does not mean that they are active users. The company also went on to say that it is really a minority of its users that are responsible for the “substantial” amount of the 5.5 billion page views that the company can boast.

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