LinkedIn’s IPO Filing: Analyzing the S-1

Note to readers: my new startup research boutique, Digital Due Diligence, performs in-depth research on dozens of companies, public and private, including LinkedIn and its key competitors. Visit our equity research page for more information.

Last month, LinkedIn filed a prospectus with the SEC. It’s a great case study: LinkedIn is one of the largest social networks, and it may be the most mature of the major social networking businesses. Like Facebook, LinkedIn has turned a profit; unlike Facebook, LinkedIn’s profit is dependent on several known business models.

The filing itself was a better read than most. Among other risks, it cited the possibility that:

[O]ur initial public offering could create disparities of wealth among our employees, which could adversely impact relations among employees and our culture in general.

I guess that’s what you get when your Chairman is an avowed “free-market socialist.”

The hurdle LinkedIn’s IPO faces is that the easy comparisons are completely wrong. LinkedIn shouldn’t be valued like a job board: for a variety of reasons, it’s a much more defensible model; LinkedIn is likely to stomp all over the traditional job boards (not so much traditional recruiters). But it’s not a “social network” that can be valued like Facebook and Twitter. LinkedIn’s business model is already in place, and its potential is a matter of execution, not innovation. Read the rest of this entry »


LinkedIn’s SEO Strategy: Own Names

I’ve already mentioned how Amazon and Wikipedia own most proper nouns, but there’s one category I ignored: full names. That’s currently a fight between LinkedIn and Facebook. Facebook has more links and more profiles, but LinkedIn has more tricks up their sleeve.

But first, an experiment: Google the full names of half a dozen of your coworkers. You may find personal sites. You may discover that some of them have the same names as famous foreign athletes. But you’ll mostly see their LinkedIn and Facebook accounts. How can it be that Facebook’s 464 million links can’t consistently beat LinkedIn’s 30 million links?

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