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Compiled by Natalie Raatz; Abhishek Sharma & Agnes Arinaitiwe. IBCON WS 2014 /151

20.01.2015Compiled by:

Agnes A. AkuamoahNatalie RaatzAbhishek SharmaAgenda1. Company profile3. Strategic analysis4. Key strategic challenges5. Strategic recommendations22. Situation appraisalCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /153Company profileXing connects, provides recruiting and manages events1. Company profileEvents

Free membershipPremium membershipAdvertising & Partner ModelPassive RecruitmentActive RecruitmentXing Talent ManagerEmployer BrandingRegistration, ticketing, billing

Business Model/ Revenue StreamsInitiativesProduct innovations in 2013:Mobile offersXING profileXING Outlook ConnectorCooperation partnersNetwork/PremiumE-Recruiting

4Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Product innovations in 2013:Mobile offersXING profileXING Outlook ConnectorCooperation partnersXing TV campaign

Expand Events segment since (building up the competency of analyzing data)So far only B2B expand to B2C

4Premium membership makes up 50 percent of Xings total revenues11 percent of total B2C users in the DACH region are premium members1. Company profileSource: Xing, 2014aSource: Xing, 2014a5Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Product innovations in 2013:Mobile offersXING profileXING Outlook ConnectorCooperation partnersXing TV campaign

5Xing has strong financial backing that it can still further exploit Burda Digital is also keen on further exploiting its online presence1. Company profileSources: (Xing, 2014b; Xing 2014c)General facts about Hubert Burda Media

Owns Burda Digital GmbH

Sales revenue in 2013 EUR 2.6 bil

Business areas:Digital marketingPublishingMagazines (on & offline)

6Source: Xing, 2014aCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /1572. Situation appraisal Xing has a strong presence in the DACH region and a healthy financial position 2. Situation appraisalSource: Statista, 2015aSource: Xing, 2014aSales CAGR +14%8* EstimationCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Strong competitors make Xings position in the DACH region uncertainLinkedin is globally dominant and Facebook potentially enters the market 2. Situation appraisal+ 45%+ 108%Sources: Xing, 2014a; Linkedin, 2014Source: Statista, 2015b9Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15103. Strategic analysis Value generation in online professional networking is two sidedThe customer is both the end user and supplier3. Strategic analysisTechnology: Software development, digital storage & data processing ADVERTISINGBUSINESSESCompanies & Event Organisations(Content provider)INDIVIDUAL USERS(Content provider)NETWORKPrimary ActivitiesInformationManagementDataCollectionInformationManagementDataCollectionSupport ActivitiesHR Management & Development: Training & incentives Infrastructure: Licenses, agreements & contracts with collaboration partnersDistribution / SocializingDistribution / Socializing11Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /1511Xings does not fully exploit the industrys key success factorsXing should aim to become the standard in the DACH region3. Strategic analysisNetwork effectsStrong brand name CredibilityContent drivenEstablishing a large member baseEstablishing a brand that attracts usersData security, privacy and acting upon user feedbackDrive up users willingness to generate more contentFive key success factors of the professional social networking industryMMHLNetwork loyaltyIncreasing switching costs to lock in the networkL

L Low M Medium H High12Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15red- Xing needs to pay attention to them as it proves their sustainability12Quick exploitation of opportunities secures short term survival Sustainability will come from addressing the threat of network effects3. Strategic analysisThreatsNetwork effects tend to create standardsUser interests are constantly shifting mobile usageStronger brands on the marketExternal FactorsOpportunitiesIncreased mobile usage Increasing importance of gaining global experienceShift from traditional recruitment due to the internet

13Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Xings main competitor could become a standardSecuring the position in the DACH region is the key to a sustainable strategy3. Strategic analysisProfessional social networksNiche professional social networksNon professional social networksGlobalLocal ViadeoLinkedinXingResearchGateFacebookMarket segmentation for professional social networksRegional14Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Strong competitors make Xings position in the DACH region uncertainLinkedin is globally dominant and Facebook potentially enters the market 3. Strategic analysis

CompetitorsXingLinkedinViadeoResearch GateFacebookGeneral information15 mil users16 languages330 mil members26 languages60 mil members9 languages5 mil users

1.35 bil active users

International reachDACH regionPresent in over 200 countriesStrong presence in France and ChinaMainly EuropeStrongest global presenceStrengthsHigh credibilityStrong brand reputationStrong presence in ChinaHigher credibility

Strong brand awarenessWeaknessLow international strengthUnreliable profiles and contentWeak financial performanceLow member baseLow credibility

Revenue streamsPremium subscriptionE-Recruiting EventsPremium subscriptionAdvertisingHR solutionsAdvertisingRecruitmentEducation

Knowledge sharingRecruitment

Advertising15Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Xing is financially more stable than its Linkedin and ViadeoXings return on investment is higher 3. Strategic analysis2013 201215% 1% 11% 2%10% 1.3717%9%0.583.13%-135% -44%18%2.55-48%

ROICReturn on SalesCapital ProductivityOperating MarginAmoritisation/ Sales14 %14%1.3616%12%2%2%8%5.85% 1.07-35%-2%14%1.12-30%16Sources: Xing, 2014a; Linkedin, 2014, Viadeo, 2014Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /1516Linkedin generates higher revenues than Xing and ViadeoXing generates 95% of its revenues from the DACH region3. Strategic analysis17Sources: Xing, 2014a; Linkedin, 2014, Viadeo, 2014Viadeo heavily invests in expanding its network to ChinaLinkedin capitalizes on their global presence as well as their home market

Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /1517Xing has not differentiated its revenue channels from its main competitors3. Strategic analysis

Revenues split by company in 2013 (in %)18Source: Viadeo, 2014Source: Xing, 2014aLinkedin, 2014Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /1518Xings low marketing expenditures and low interactivity on the Xing platform cannot ensure the loyalty of its users3. Strategic analysisWeaknessesInternal FactorsStrengthsBig premium member baseStrong position in DACH regionGood premium service packageMicrosoft Outlook ConnectorCreditability

Low interactivity Less aggressive in marketing campaignsLower member base than main competitors19Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /1519Xings key resources is its network in the DACH regionStronger linkages could lead to more network utilization3. Strategic analysisNetworkNetwork of users (B2C)Network of recruiters (B2B) Informative linkagesFeaturesShare buttonXing AppXing API

ToolsXing Talent ManagerMicrosoft Outlook ConnectorActivitiesEventsEvents Plus

20Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B20Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15214. Key strategic challengesXing experiences a strategy shift from global to regionalXing aims to consolidate its position in the DACH region4. Key strategic challengesPrevious strategyIn 2011 Xing closed offices in China, Turkey and Spain

Current strategyDACH region Business professionals and companies8 million membersMain focus: Premium members

Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Xings existing users could easily switch to Linkedins larger networkLinkedins global network is larger than Xings by 315 million users4. Key strategic challengesXings weak spotsThe 5 million members that Linkedin gained in the DACH should have been tapped by XINGXing currently has only two people employed in its marketing departmentLinkedin gained 5 million new members in the DACH region over the last 5 yearsThe DACH region is of great importance to us. In August 2011 we set up offices in the region and have been growing our staff as well as the network since then. We will be concentrating on this region in the future and intergrating functions and features that our DACH users find the most attractive and functional.Linkedins CEO of DACH region Mr.Till KaestnerSources: Xing, 2014a; Linkedin, 2014; Saatkorn,2013 + 45%+ 108%Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Facebook at WORK - a new and unforeseen threat to Xings sustainabilityFacebook is the leader when it comes to user interactivity4. Key strategic challenges

Reviews reveal user dissatisfaction with the level of interactivity on XingThe knowledge facebook has gained on user behavior through its 1.35 bil members is a strength for them i)Users are spending an average of 21 minutes a day on facebook ii)

Sources: i) Manager Magazin, 2014; ii) Finanzen.net, 2014Source: Statista, 2015bCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /1525KEY QUESTIONIs XINGs current strategy to focus on the DACH region sustainable?

Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15265. Strategic recommendationsNiche strategy Internal network for businesses in the DACH region Lock in business users to secure the network5. Strategic recommendations

Businesses = EmployeesBusinesses hold the right to determine what internal network their employees have to use in the work placeThe purpose of an internal networkBreak down boundaries and create a positive work environmentEnhance work relations across divisions and departmentsTarget and win DACH based companies to gain their employeesBusinessesEmployeesEffectActionCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B27Niche strategy Internal network for businesses in the DACH region Xing can build indispensible value for both the business and itself5. Strategic recommendations Support AT WORK communicationCalenders & presentation sharingInnovation & idea sharing platformInternal events & newsFeedback channelingMentoring space & internal job offersTravel planningHoliday schedulingXings Outlook Connector plus the German language strength are great tools to build on

Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B28Niche strategy Internal network for businesses in the DACH region Build a loyal network by fostering a work-life balance5. Strategic recommendations

Work life balance enhancementsCreate interactive networks within the networkXING AT WORKXING AT HOMELIFE BALANCECONNECTThe more content is generated, the higher the switching costsSports networksBlogging networksGaming networksInvestment networks

BECompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B29Niche strategy Internal network for businesses in the DACH regionThe DCF forecast presumes a 10% annual growth of revenues5. Strategic recommendations* Estimations**SGA- Selling, general and adminsistrative costt012345Income Statement in 000 EUR2015*2016*2017*2018*2019*2020*Revenues93.228102.550112.805124.086136.495150.144Revenue growth (%)5%10%10% 10%10%10%SGA**69.92176.91384.60493.065102.371112.608EBIT23.30725.63828.20131.02234.12437.536EBIT margin25%25%25%25%25%25%Tax (25%)5.8266.4097.0507.7558.5309.384Net income17.48019.22821.15123.26625.59328.152Capital expenditure1.000-----Free cash flow17.58019.22821.15123.26625.59328.152WACC7,8%Beta1,29NPV367.84030Source: Oxford, 2014Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B30Niche strategy Internal network for businesses in the DACH region Gaining new internal network users will secure steady revenues5. Strategic recommendations* Estimations**SGA- Selling, general and adminsistrative costCharacteristicsRevenue growth based on average growth rate of business usersStrong increase in SGAIncreased sales & marketing expendituresIncreased personnelOne time capital expenditureSet-up of internal platformProgrammingFreelancersEquipment31Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B

The 2 most improttant things we want to pount out here are revenues and SGA expenses31Niche strategy Internal network for businesses in the DACH regionDCF valuation results in positive future cash flows5. Strategic recommendations* EstimationsSGA- Selling, general and adminsistrative costAlongside the three existing business segments Xing will generate approx. EUR 17 million in positive cash flow by 2020 32Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B

Future operating cash flow (EBITDA) minus future capital expenditures reveal positive future cash flows for Xing

32Niche strategy Internal network for businesses in the DACH region Deeply rooted mutually beneficial relationships build sustainability 5. Strategic recommendations Powerbase bolsteringCross-departmental learningCareer growth path from within the business

Increased knowledge exchangeFind the talents withinEliminate bureaucraciesXING

Benefits for XING and its already existing network

First mover advantage that will secure Xing a sustainable position in the DACHLarger member base gained through the employees that come through the businessesDeeper knowledge of the business clients that Xing can exploit for further growthHigher content hence higher switching costsBenefits for the EmployeesBenefits for the BusinessesCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2BAll three parties are set to benefit which contributes and drives Xings sustainability

33Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /1534DIVERSIFICATION STRATEGY: DATA ANALYTICS PROVIDER ON AN INDUSTRY LEVELDiversification strategy Data analytics provider on an industry levelXing is active in segments that are relevant for the future of data analytics5. Strategic recommendationsThe purpose of data analyticsTo draw meaningful insights from the data and provide decision making support to businessesSources: Statista, 2015cCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B35

Diversification strategy Data analytics provider on an industry levelThe DACH region is specially important for businesses that drive quality5. Strategic recommendationsA valuable support for businessTracking behavioral patternsPredicting future trendsQualitative assessmentSupporting trendsGrowing mobile usageM2MAdvertising & online marketingXing is a platform where industries, businesses and individuals interact and generate valuable data Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B36Diversification strategy Data analytics provider on an industry levelBurdas product range offers Xing an immediate competitive advantage5. Strategic recommendations

1995THE BURDA FAMILY 2014International reachDACHProduct rangeXING has access to data that is important for businesses in the DACHBurdas online magazines are successful and well known brandsXINGs has the right internal foundationOn-platform generated dataEvents plusBurda familyWith data analytics Xing and Burda would further mutually benefit each otherCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B37Diversification strategy Data analytics provider on an industry levelThe DCF forecast presumes a 5% annual growth of revenues5. Strategic recommendations* Estimations**SGA- Selling, general and adminsistrative costt012345Income Statement in 000 EUR2015*2016*2017*2018*2019*2020*Revenues91.84096.432101.255106.320111.636117.217Revenue growth (%)4%5%5% 5%5%5%SGA**73.47277.14681.00485.05689.30993.774EBIT18.36819.28620.25121.26422.32723.443EBIT margin20%20%20%20%20%20%Tax (25%)4.5924.8215.0625.3165.5815.860Net income13.77614.46515.18815.94816.74517.538Capital expenditure20.000-----Free cash flow-20.00012.73212.35511.99011.63610.958WACC8,2%Beta1.39NPV204.67438Source: Columbus, 2014aCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B38Diversification strategy Data analytics provider on an industry levelBroadening into data analytics results in revenue growth in the long-run5. Strategic recommendations* Estimations**SGA- Selling, general and adminsistrative costCharacteristicsRevenue growth range of existing big players 7-15% i) High initial cost of investment for:Analytical applicationsBusiness intelligence toolsData warehousing (optional)Higher risk profileExpected boom of industry in long-run ii)

39Source: i) Kelly, 2015; ii) Columbus, 2014b Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B39Diversification strategy Data analytics provider on an industry levelDCF results in short-run decline followed by an increase in the long-run5. Strategic recommendations* EstimationsSGA- Selling, general and adminsistrative cost40Alongside the three existing business segments Xing will experience a slight decline in cash flow that does not turn negativeIn long-run Xing can experience increasing cash flows due to the predicted boom in data analytics

Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B40Diversification strategy Data analytics provider on an industry levelAll parties benefit which contributes and drives Xings sustainability5. Strategic recommendations Shift from simply accumulating data to actually using itPlan and predict accuratelyIncrease efficiency and customer satisfactionGain an indispensible importance to BurdaGenerate value out of existing assetsSpear head the relevance of data for the futureBURDABenefits for Burda and its already existing network

First hand access to the analytics would consolidate Burdas position especially for the futureBetter assessment of the performance of various Burda brandsBetter product development and targeting more especially for the online marketing Better departmental performance due to the availability of the right dataBenefits for BusinessesBenefits for XingCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15API- tool to publish information on Xing for B2B41Xing has two options to ensure its sustainability The niche strategy provides lower risks at a strong revenue growth rate5. Strategic recommendationsStrategy A (in 2020)150.14410.958117.217RevenuesFree cash flowBetaNet Present ValueWACC42Initial investmentStrategy B (in 2020)10.95820.000.0008,2%1,391.000. 000204.6747,8%1,29367.840Niche strategy internal network for businesses in the DACH regionDiversification strategy data analytics provider on an industry levelCompiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /1542Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /1543Thank you for your attention!Do you have questions?Sources44Bloom, Evan; Leonard, Aaron; Reeves, Matt (2009). The Network Value Chain. World Bank Institute, 30.Columbus, L. (2014a). The Top 100 Enterprise Analytics Startups Of 2014. [online]. Available at: [Accessed 05 January 2015].Columbus, L. (2014b). Roundup Of Analytics, Big Data & amp: Buisness Intelligence Forecasts And Market Estimat [online]. Available at: [Accessed 15 January 2015].Finanzen.net (2014). Soziales Bro Netzwerl: Fcaebook greift Mircosoft, Google, Linkedin und Xing gleichzeitig an. [online]. Available at: http://www.finanzen.net/nachricht/aktien/Soziales-Buero-Netzwerk-Facebook-greift-Microsoft-Google-LinkedIn-und-Xing-gleichzeitig-an-4025829 > [Accessed 16 January 2015]. Kelly, J. (2015). Big Data Vendor Revenue And Market Forecast 2013-2017. [online]. Available at: [Accessed 13 January 2015].LinkedIn (2014). Annual Reports. [online]. Available at: [Accessed 10 November 2014]. Manager Magazin (2014). Facebook testst soziales Netzwerk fr Unternehmen. [online]. Available at: [Accessed 16 January 2015]. Oxford, T. (2014). Internal social media Part 1: What is it and why does it count?: Useful Social Media. [online]. Available at: http://usefulsocialmedia.com/measurement/internal-social-media-part-1-what-it-and-why-does-it-count > [Accessed 13 January 2015].Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15SourcesSaatkorn (2013). Interview mit Linkedin Deutschlandchef Till Keastner rund um die Studie Global Recruting Trends 2013. [online]. Available at: [Accessed 03 January 2015].Statista (2015a). Marktanteile der Top 10 Social Networks in Deutschland im Jahr 2014. [online]. Available at: [Accessed 03 January 2015].Statista (2015b). Top 20 soziale Netzwerke in Deutschland nach Anzahl der Visits* im Februar 2014 (in Millionen).[online]. Available at: [Accessed 10 January 2015].Statista(2015c). Prognose zum Umsatz mit Big-Data-Lsungen weltweit von 2011 bis 2017 (in Millarden US-Dollar. [online]. Available at: [Accessed 10 January 2015].Viadeo Group (2014). Financial News Archives. [online]. Available at: [Accessed 03 November 2014].Xing (2014b). Corporate Pages|XING AG. [online]. Available at: [Accessed 10 November 2014].Xing (2014c). Prsentation zur Hauptversammlung 2014 [online]. Available at: [Accessed 10 November 2014].Xing (2014a). Annual Report 2013. [online]. Available at: [Accessed 10 November 2014].

45Compiled by Agnes Arinaitiwe; Natalie Raatz; Abhishek Sharma. IBCON WS 2014 /15