Business social network LinkedIn filed for an initial public offering late Thursday, offering the first public glimpse into the finances of the seven-year-old Web company. LinkedIn turned a profit of $10.1 million on revenue of $161 million in the first nine months of 2010, according to documents filed to the Securities and Exchange Commission. Read more after the jump!
(CNN MONEY)–But it may not last: “We expect our revenue growth rate to decline, and as we continue to invest for future growth, we do not expect to be profitable on a GAAP basis in 2011,” the company warned in its filing.
In 2009, its last full fiscal year, LinkedIn had a loss of $4 million on sales of $120.2 million. The company has been in the red every year except 2006, when it turned a slight profit on revenue of $32 million.
The company isn’t hurting for cash: It’s currently sitting on a stash of $89.6 million. LinkedIn filed to raise up to $175 million in its offering, but that’s a preliminary number and companies often change those targets as they get closer to their IPO.
The professional networking site launched in May 2003, and it’s now adding one new user every second. LinkedIn has more than 90 million users, with more than half of its members located outside of the United States.
Tech IPO market finally starts to thaw
But LinkedIn warned about increased competition both stateside and overseas, naming Facebook, Google (GOOG, Fortune 500), Microsoft (MSFT, Fortune 500) and Twitter as rivals who “could develop competing solutions or partner with third parties to offer such products.” It also called out Xing in Germany and Viadeo in France.
In the three months ending in September, 65 million unique users visited LinkedIn’s site.
The company now has 990 employees — though many of them are newbies. LinkedIn said that more than half of its staff has been with the company for less than one year, and 74% joined within the past two years.
CEO Jeff Weiner pulled in a $250,000 salary and a $211,055 bonus in 2010.
LinkedIn has a dual-stock structure, which gives the company’s insiders sigificant control over shareholder decisions even after others become stockholders. Google and Facebook have similar structures.
Co-founder Reid Hoffman and other executives hold Class B shares, which have 10 times the voting power of the Class A shares LinkedIn will sell to the public. It’s a structure that’s controversial with shareholder advocates but popular among Silicon Valley companies, which want to ensure that their founders are able to enforce their vision.
“The holders of our Class B common stock collectively will continue to control a majority of the combined voting power of our common stock even when the shares of Class B common stock represent as little as 10% of the combined voting power of all outstanding shares,” LinkedIn wrote in its SEC filing. “This concentrated control will limit your ability to influence corporate matters for the foreseeable future.”
The path to IPO: LinkedIn has raised more than $100 million in venture capital funding from big names including Goldman Sachs (GS, Fortune 500), McGraw-Hill, Sequoia Capital, Bain Capital and Greylock Partners.
I was pleased recently to receive an email this weekend from the founder of Linkedin advising that I was among the first million users or registrants of Linkedin. Having qualified to be included in this special club of early adopters I would like to raise a proposal for consideration and comment.
Linkedin is a very useful and I believe business oriented website and I genuinely feel it has great potential for business longevity far beyond that of Facebook. This is simply because it contains useful business content that is continually updated by it members and can be indexed and located by industry category. As membership grows this usefulness will grow exponentially in addition to those obvious benefits to those in the recruitment field.
As Linkedin is the “platform” and essentially its members are the “content” which they provide grati,s I want to raise the question of whether the founders might consider including the first one million members as participants in its intended IPO
As all social networking sites would acknowledge it is the first critical mass of members which takes it into the realm of a serious business model which then attracts the external investors. When Linkedin reached 1,000,000 members it achieved a critical mass which then attracted further members and perhaps this was impliedly acknowleged by the founder in sending an email recognition to those members who had that special distinction,myself included.
What could be possibly more democratic in a free market economy than a participation in the IPO by those who were among the early adopters that helped Linkedin achieve its milestone of a million members and set it on its path to a viable and hopefully profitable business going forward. Not to mention, the beneficial publicity which would ensue for Linkedin in granting this privilege to that class of members and therefore setting it apart from its competitors.
I look forward to receiving others view or comments on the above.
Richard Kimber