csp2015n team 6 - linkedin

> LinkedIn Company Overview

90450+

40,000+50%

Years of Experience

Companies Represented

LinkedIn Connections

Over 500+ Connections

UVA MSMIT Class of 2015 has a valuable and robust network on LinkedIn


LinkedIn Overview

1

Industry Analysis

3

Competitor

Analysis

4

Strategy Assessme

nt

5

Proposed Initiative

6

Financial

Impact

7

Final Thoughts

8

Business Model

2

Our Agenda


LinkedIn is the world’s largest professional social network

364M+

professionals

3M+companie

s

200+countries

14technologyacquisitions

$2.2B+annual

revenue

Executives from every

Fortune 500company

24languages

2011IPO


2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

50000000

100000000

150000000

200000000

250000000

300000000

350000000LinkedIn membership growth

Professionals join LinkedIn at a rate of two new members per second


LinkedIn is a platform that connects professionals with opportunities

Recruiters

Marketers Sales

Professionals


LinkedIn is a platform that brings together professionals, recruiters, marketers and sales people

Recruiters

Marketers Sales

Professionals


Recommendations add a level of public accountability that is valuable to professionals and recruiters

Professionals


A professional profile allows you to be available for passive recruitment opportunities

Professionals


LinkedIn provides the paying member base with many benefits and features

Recruiters

Marketers Sales


LinkedIn’s platform provides ultimate value for recruiters, marketers and salespeople through greater access


We have found both positive and negative network effects for professionals and the paying member base in the 2-sided market


Positive network effects are seen when the relevant member base increases

Recruiters

SalesMarketers+ Positive Network

Effect

Professionals


Professionals

- Negative Network

Effect

Negative network effects can be seen when there is disproportionate growth on either side

Recruiters

SalesMarketers

> LinkedIn Business Model

How does LinkedIn make money?

Does their business model make sense?

Which industry do they play in?

LinkedIn offers both free and paid services to generate revenue

Corporate Solutions1. LinkedIn recruiter2. LinkedIn job

postings3. Subscriptions for

individuals

Talent Solutions

Recruiters

Marketing Solutions

Advertise to the LinkedIn Network1. Display ads2. Sponsored

InMails3. Application

Programming Interfaces (API)

Marketers

Sales

Premium Subscription

s

Subscription Bundles:

1. Who’s Viewed Your Profile

2. How You Rank3. Premium Search

FreemiumSolutions

Features Offered1. Professional

profile 2. Company pages3. Build network

Professionals


Talent Solutions continues to bring in the majority of the revenue for LinkedIn

Talent Solutions, 62%

Marketing Solutions, 19%

Premium Subscrip-tion19%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2009 2010 2011 2012 2013 2014 2015

0100200300400500600700

0

0.2

0.4

0.6

0.8

1

1.2

1.4

Talent Solutions Marketing SolutionsPremium Solution YOY Growth

Reve

nue

(Mill

ions

)


Leverage Social Networking for Recruiting

Active and Passive Recruiting

Social Networkin

gRecruiting

LinkedIn disrupted the recruiting industry by combining social networking and recruiting

Industry & COMPETITOR ANALYSIS

WEAKNESS Identifyplayers

Industrylayout

STRENGTHS

> Industry Analysis

Fierce Competitive Rivalry PotentialNew Entry

(M)

Buyers(L)

Suppliers (L)

Substitutes(L)

CompetitiveRivalry

(H)

Social networking industry has intense rivalry between competitors

> Industry Analysis

Moderate barrier to entry means competition from new entrants

New entrants must offer new features to build members

PotentialNew Entry

(M)

Buyers(L)

Suppliers (L)

Substitutes(L)

CompetitiveRivalry

(H)

> Industry Analysis

Companies make significant technology investments to stay ahead

High Growth

> Industry Analysis

PotentialNew Entry

(L\M)

Buyers(L)

Suppliers (L)

Substitutes(M)

CompetitiveRivalry

(H)

Online recruiting companies compete for resumes to attract recruiters

High Competition

> Industry Analysis

PotentialNew Entry

(L\M)

Buyers(L)

Suppliers (L)

Substitutes(M)

CompetitiveRivalry

(H)

Online recruiting also has a moderate barrier to entry

New entrants with specialized job boards

> Industry Analysis

LinkedIn is a major disruptor in the online recruiting industry

Monster’s Value dropped by billions

> Competitor Analysis

$ 12.46 B $ 1.4 B $ 770 M $ 31.8 MBecome the largest

online advertiser by attracting

online marketers with their 1B

actively monthly users who leverage Facebook's socials

network applications.

To be the source of real-time,

unfiltered opinions on any type of event in the world from many people's

point of view that can be analyzed by any company.

To expand the professional

network to new regions by

personalizing the services and

offerings based on the culture.

To transform into a complete job seeking, career management solution for all levels of job seekers and recruiters by

leveraging the Brand and technology platform.

LinkedIn’s key competitors have different strategies and strengths


63 M

347 M

236 M

65 M

1.39 B

Social networking sites compete on member size

LEGEND

= 25M


The demographic breakdown shows disparity among competitors

63 M

347 M

236 M

65 M

1.39 B

LEGEND

= 25M

= User < 30

> Strategy Assessment

OFF

ERIN

GS

Professional Identity

Building & Managing

Professional Networks

Active Job Search

Professional Vetting

Non-professional

vetting

FACTORS OF COMPETITION

LinkedIn Twitter Facebook Viadeo Monster

# of Professionals

There are bitter rivals between competitors based on feature sets and offerings for professionals


“To grow and expand the world's largest online professional network, focusing exclusively on skilled professionals and providing differentiated information and connections that are useful to manage a professional identity at all career stages. “

LinkedIn’s strategy to focus on professionals and professional information allows it to stand apart from its competitors

GROW AND EXPANDSKILLED PROFESSIONALSDIFFERENTIATED INFORMATION & CONNECTIONS

Find Work

Dream Job Be Great

ALL CAREER STAGES


Information obtained from your network

Repository of professional information

LinkedIn has two unique resources that cannot be easily replicated

T

> Strategic Motivation

Competition will continue in the social networking industry

• New entrants • Incumbents

encroach• Online job boards move more

towards social• Competition for user

engagement

SOCIAL MEDIA

> Strategic Motivation

In the future LinkedIn may face challenges building their member base

• LinkedIn not first social network of choice

• Feature parity erodes advantages

• Users won’t rebuild networks

Campus Discover Your Potential

> Strategic Initiative

LinkedIn focuses on the professionals but provides little value to pre-professionals

Professionals

Professional Pre-Professional


LinkedIn Campus will give pre-professionals, universities, and college recruiters a reason to leverage LinkedIn instead of other social networks

Pre-Professionals

Universities College Recruiters

• 129M Pre-professionals

• 46% of workforce in next 5 years

• Pressure to find their students jobs

• Leverage the reach and power of LinkedIn

• Must learn many systems

• LinkedIn is not main system

LET’S TAKE A LOOK AT HOW IT WORKS



LinkedIn Campus provides a FREE way for pre-professionals to track and take control of their career

• Join university portal• Targeted job offers• Search all university jobs• View, find, and connect

with students and alumni

• Subsidized cost


LinkedIn Campus makes it easier for universities to promote their students to help them find jobs

• Exclusive portal• Approve job postings• Analytics on university

portal• Student and alumni

career history• Subsidized to attract

universities


LinkedIn Campus is a premium service that saves college recruiters time and money

• One : Many job posts• University

recommendations• Job post analytics• Exclusive access to

students and alumni • Subscription model

CAMPUS

199$per job post

5 Schools50 InMail

50 HTTPBuy Now

CAMPUS PRO

399$per job post

20 SchoolsUnlimited InMail

50 HTTPBuy Now

CAMPUS PLUS

299$per job post

10 Schools200 InMail

50 HTTPBuy Now

> Financial Impact

LinkedIn Campus introduces a new revenue stream, increases profits and members, and addresses competitor encroachment

MEMBER I N C R E ASE

45MR e v e n u e I N C R E A S

E

28%

> Financial Impact

The business case takes challenging variables and assumptions into account

COST OF DEVELOPMENT, LAUNCH AND SUPPORT

$

##

NUMBER OF INTERNSHIPS ANDGRADUATE JOBS

ADOPTION

Technical LaborHardware Software MarketingSalesCustomer Support

USA 2,635,400Japan 1,208,750India 1,650,000China 3,550,000Australia 824,515Latin America 700,000Africa 807,000UK 635,400

TOTAL JOBS 2015/2016 11,634,066

Adoption Rate 40% - 60%

Cannibalization 30%

> Financial Impact

TOTAL COST (TCO)

WORST CASE LIKELY CASE BEST CASE

NET INCOME

NPV

IRR

$ 53.5 Million

( $ 114 Million)

0%None

17% 20%

$ 103 Million

( $ 161,609 )

$ 133 Million

( $ 436,230 )

$ 107 Million $ 137 Million

HURDLE RATE

15%

The 5-year financial analysis identifies a best case with a return of 20%

ADOPTION RATE 40% 50% 60%

> Financial Impact

The ‘Likely’ and ‘Best Cases’ present LinkedIn with favorable cash flows

2015 2016 2017 2018 2019 2020

$50,000,000

$40,000,000

$30,000,000

$20,000,000

$10,000,000

$0

$10,000,000

$20,000,000

$30,000,000

LinkedIn Campus Cash Flows

Worst Case Likely Case Best Case

> Financial Impact

LinkedIn Campus will be launched in three phases

• Soft launch• University adoption is

key• Hire and train support

staff for full launch

• Aggressively market in the USA to 2,968 universities and colleges

Phase 1

• Global roll out

Phase 3Phase 2

• Low adoption rates• Universities• Students• Recruiters

• Competitor(s) launch similar offering

• Economic downturn and job scarcity

RISKS

> Final Thoughts

People want to keep their social and professional lives separated

csp2015n team 6 - linkedin

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