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Kai Dengler , Lusi Fei , Rita Xu Han, Barnaby Jinhao Liu, Michelle Yuqing Xiao

Kai Dengler , Lusi Fei , Rita Xu Han, Barnaby Jinhao Liu, Michelle Yuqing Xiao . 200M+. Outline. US President Barack Obama outlined details of his $447 billion jobs plan at LinkedIn.  Current News.  Ratios Analysis.   Future Growth. Company Overview. Overview.

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Kai Dengler , Lusi Fei , Rita Xu Han, Barnaby Jinhao Liu, Michelle Yuqing Xiao

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  1. Kai Dengler, LusiFei, Rita Xu Han, Barnaby Jinhao Liu, Michelle Yuqing Xiao

  2. 200M+

  3. Outline US President Barack Obama outlined details of his $447 billion jobs plan at LinkedIn  Current News  Ratios Analysis   Future Growth Company Overview

  4. Overview Founded in December 2002 and launched on May 5, 2003 Ranked: -11th of the most visited websites in the US; -Top 10 in 14 other countries Now it has over 202,000,000 members in more than 200 countries, most influenced countries are US, UK, India, Europe, Canada, Brazil, Australia World's Largest Professional Network Site

  5. Top Management Team

  6. Business Model Cash flow positive since 2009; 40% increase in Net Income since IPO Revenue grows steadily since founded Three main revenue sources: Hiring solutions (50%), Marketing solutions (30%), Premium subscriptions(20%) in 2012

  7. Business Model Facebook: Fierce competition from Google, Twitter, ads (1 click /2000); Impair user experience; Fail to earn money on mobile users (50%) Revenue per user per hour: LinkedIn $1.30 (Facebook $0.06) LinkedIn’s Annual Revenue Breakdown Facebook’s Annual Revenue Breakdown

  8. Stock Price Over the Prior Year LinkedIn S&P 500 Facebook LinkedIn IPO at $45 on May 19, 2011, now $175.99, effective annual rate 130% Evercore Partners analyst upped target Buy rating on LinkedIn shares to $200, projected $280 in five years Facebook IPO at $38 on May 18, 2012, now $27.52, effective annual rate -28.01%

  9. Liquidity Ratios Above 1 all the time: healthy 2012: whole market failure, but we don’t decrease a lot 2009  2010: goes up because deferred revenue goes up (current liability goes up)

  10. Activity Ratios Cash Conversion Cycle A/P Turnover A/P turnover decreasing, while Facebook is increasing Cash conversion cycle goes down and shorter than Facebook

  11. Solvency Ratios Debt to asset ratio: lower than 0.5, able to cover debt 2009  2010: goes up because deferred revenue goes up 2012: whole market failure, but our ratio didn’t increase a lot Debt to equity ratio: under 1, good ; Debt free (no short term debt or long term debt)

  12. Profitability Ratios All ratios outperform Facebook in 2012 High gross profit ratio, but low net profit ratio because of R&D, sales & marketing

  13. Market Ratios Earnings per share: higher than Facebook P/E ratio: lower than Facebook, earn more with less investment

  14. Tax Management Neither LinkedIn nor Facebookpaid federal income tax for past three years Lower effective tax rate => LinkedIn paid less taxes percentage of its economic profit than Facebook LinkedIn Facebook

  15. Outlook and Future Development Steady revenue source——Enterprises Recruiter seats ($8200/seat per year) Large customers include: Adobe, Netflix, Apple, Microsoft v v v Potential overseas market v 60% of LinkedIn’s members outside the U.S.. e.g. India, UK, Brazil Growing markets: China, Japan, Australia v No access restriction all around the world (Facebook is blocked in China) Strong partnership and acquisition vPartnership with Twitter vAcquisition Slideshare etc.

  16. Outlook and Future Development v v v v Employee Loyalty Everyone gets an IPAD mini for LinkedIn’s outstanding performance in 2012 Salesperson gets high salary $400,000/yr Amazing return on stock options Transparency- Jeff Weiner(CEO) “Treat employees like adults” New Products v LinkedIn Talent Connect vLinkedIn Talent Pipeline

  17. Risk factors General risk factors Economic • All companies in Internet industry are exposed to the general macroeconomic risks (growth/recessions) Government Law • Taxation law is changable => avoid tax ? • Continue maximizing deferred tax Other • Losing key employees • Litigations risk and lawsuits Company specific Cyber attacks • Hackers could attack LinkedIn's servers and sniffing Intra-  competition • Professional network website :Viadeo • Social network website: Facebook, Twitter

  18. Why LinkedIn? v v RETURN IPO $45 a share in May 2011. Current stock price around $175 a share, over 100% effective annual return Evercore Partners analyst upped target Buy rating on LinkedIn shares to $200, projected $280 in five years Low Risk vSteady revenue source: Enterprises vBooming industry v Few competitors

  19. Q&A Kai Dengler, LusiFei, Rita Xu Han, Barnaby Jinhao Liu, Michelle Yuqing Xiao

  20. Lawsuit Katie Szpyrka v. LinkedIn Corporation: customer privacy Reaction--- Improved privacy protection technology and anti-hacker device Facebook lawsuit number:20+ Max settlement fee: LinkedIn: 5 Million Facebook: 20 Million InNova Patent Licensing LLC v. LinkedIn Corp And Others: Patent Infringement

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