GigaOM » Tech

LinkedIn: Mobile growing fast in everything but revenue

Ryan Lawler — Thu, 09 Feb 2012 23:00:57 +0000

LinkedIn reported fourth-quarter earnings that beat the street and showed strong growth in members, unique visits and page views from its users. But one key metric that stood out is how many users are signing on from their smartphones and tablets, as mobile usage is the fastest-growing part of its business.

Mobile now accounts for 15 percent of all visits to LinkedIn, CEO Jeff Weiner told investors and analysts on the fourth-quarter earnings call. That is up from 9 percent of traffic that mobile accounted for about halfway through 2011. Growth is coming in part from improved mobile applications and more customer adoption from those products.

One thing that isn’t growing tremendously in mobile is revenue, however. That could change in the future, as the company looks to add monetization through advertising on mobile devices. “We were very focused on getting the product right and the user experience right,” Weiner said. “Now that that’s in place, we’re going to start to run some tests with ads within the mobile environment.”

Of course, LinkedIn isn’t the only social network that has yet to monetize its mobile apps. Facebook, for instance, has much higher engagement on its mobile apps, with about half of its unique visitors coming from mobile devices. It too doesn’t place ads on those apps yet, something that Facebook highlighted as one of its risk factors in its recent S-1 filing.

The good news for LinkedIn is that to date, mobile isn’t cannibalizing engagement on the company’s website, which it does place ads against. In fact, LinkedIn is seeing an increase in the connection density it gets from mobile users and the number of connections on the network.

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Social Q&A platform Beepl goes live

Ryan Lawler — Mon, 16 Jan 2012 12:00:00 +0000

Beepl opened its social question-and-answer site to the public on Monday, with the hopes of challenging Quora and similar startups by finding the right specialists to answer user questions. It does that with technology that matches up users with the queries that they are most interested in and most qualified to answer.

Users can sign in to Beepl with their Facebook, Twitter and LinkedIn accounts, linking the new service to their social graphs. Once a user has logged in, Beepl scans their social media profiles to create an interest graph. The company uses semantic technology, natural language processing and machine learning to build its network of subject matter experts and to deliver relevant questions to them.

The idea is that “users don’t follow topics, but topics follow them.” Beepl also ranks users, creating an algorithmically determined “Beepl score” based on their contributions to the site. That helps it further identify users who provide valuable input on the site.

While using people’s existing social graph is a good, fast way to determine what they are knowledgeable in, linking to their Twitter accounts also enables Beepl users to send questions to the system using the #ask hashtag. In addition to responses that happen on the site, Beepl will also pull in any responses that emerge from their Twitter followers.

Beepl, which is headquartered in London but has an office in Prague, was founded by CEO (and former TechCrunch journalist) Steve O’Hear. The startup has spent the past three months in a private alpha period before preparing for launch. In July, Beepl announced a seed investment from Credo Ventures, and Credo partner Ondrej Bartos sits on Beepl’s board.

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LinkedIn open sources code from IndexTank acquisition

Colleen Taylor — Thu, 22 Dec 2011 01:29:09 +0000

Solid engineering talent is such a prized resource nowadays that many tech firms have taken to doing acqui-hires, which is the practice of buying a company for its employees rather than for its products or technology. But it’s not just startup founders and programmers who are benefiting from this trend — the open source community has been a winner as well.

On Wednesday, LinkedIn announced that the technology behind IndexTank, the search engine startup it acquired back in October, has been released as open source software under the Apache 2.0 license. At the time of the deal, it was pretty clear that the IndexTank buy was motivated largely by talent: The company had 11 employees, nine of whom were engineers, and financial terms of the deal were kept under wraps. The technology IndexTank built was very compelling, but the team behind it was likely the most attractive aspect to LinkedIn.

That’s why it’s good news that IndexTank’s code will live on, and that others will be able to build on top of it. IndexTank essentially build software to help search and query large amounts of data, even on devices with limited processing power such as cell phones. It’ll be interesting to see what people do with this now that it’s open source.

It seems that releasing acquired technology as open source software is a growing trend for acqui-hire deals. Earlier this week, for example, Twitter started releasing the code from recently-acquired mobile security startup Whisper Systems as open source software. Some people may see such open source releases as consolation prizes, but it’s better than the alternative: Historically, a startup’s customers worry about products languishing or being shut down altogether after an acquired by a larger firm. These open source releases mean that technology will live on, regardless of what happens with often unpredictable M&A integrations.

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LinkedIn biz card iPhone app CardMunch gets makeover

Colleen Taylor — Tue, 15 Nov 2011 13:30:13 +0000

Back in January 2011, LinkedIn acquired a startup called CardMunch, a very handy iPhone app which scanned, transcribed and organized business card information. On Tuesday, the company is set to announce a relaunch of the CardMunch iPhone app with a new look and feel.

Over the past several months, LinkedIn says it has rebuilt CardMunch from the ground up to tie it in more wholly with the professional social network. Now, once a person’s business cards are scanned, the CardMunch app will map that information and tie it to his or her LinkedIn profile. LinkedIn puts it this way: “Now you know the person behind the card — the who, what, where and when for every business card you scan.” Indeed, the new app could make first impressions more well-informed than ever.

The company says the rehaul has also made the app simpler and quicker to use. Its user experience now is composed of just three screens: card capture, contact list, contact details and LinkedIn profiles.

CardMunch has always been a cool app, and it made lots of sense as an acquisition for LinkedIn. In addition, LinkedIn says its mobile page views have grown 400 percent year-over-year, so mobile is a hugely strategic place for the company going forward. The new upgrades seem solid, but people can be quite touchy about apps they love, especially ones they use professionally, so it will be interesting to see how people react to the CardMunch facelift.

Here are a couple of screenshots of the new CardMunch for iPhone (click to enlarge):

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LinkedIn acquires search engine startup IndexTank

Colleen Taylor — Tue, 11 Oct 2011 21:41:00 +0000

LinkedIn made its second small acquisition in as many weeks with the purchase of IndexTank, a San Francisco-based startup that makes a real-time, hosted search engine service.

Financial terms of the deal have not been announced, but it looks like another small one. IndexTank has reportedly raised $1.6 million in seed funding to date, and the company has 11 full-time employees, nine of whom are engineers. Now that good engineers are notoriously hard to find and, in the San Francisco Bay Area, even harder to hire, LinkedIn’s purchase of IndexTank could well be largely an acq-hire move.

On its website, IndexTank explains its technology thusly: “You can use IndexTank to create a finely tuned search function for your web site or application. If you have content you want your users to find, but you don’t want to deal with complicated coding and system administration tasks, IndexTank is for you.”

Here’s what LinkedIn has to say about the deal:

“LinkedIn has always focused on delivering the best professional search tools to our members. The more than 120 million professionals that make up LinkedIn use search to connect, find, and be found, as well as to gain insights that help them be better at what they do; they are on track to do more than four billion searches on LinkedIn this year. The IndexTank acquisition brings an infusion of great search technology and talent to LinkedIn, and will help our internal teams build even better search products and experiences for our members.”

The relatively small deal is another example of the conservative way LinkedIn has opted to spend the $352 million it pulled in from its May 9 initial public offering on the New York Stock Exchange. Last week, LinkedIn acquired Connected, an online address book service run by a husband-and-wife team. LinkedIn’s stock market valuation is currently $7.22 billion, so bigger deals could be on the horizon — but in the current environment of global economic unrest, the company is clearly going for the slow and steady route for the time being.

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LinkedIn starts spending its IPO cash — very, very slowly

Colleen Taylor — Wed, 05 Oct 2011 22:45:14 +0000

LinkedIn has finally started spending some of that cash it raised when it made its stock market debut earlier this year — but given the company’s $7.3 billion market cap, its first post-IPO acquisition is not quite as big as some might have expected. The company announced Wednesday it has acquired Connected, a small online address book service.

In a post earlier this year, on GigaOM’s Collaboration channel, Simon Mackie explained Connected this way:

“Connected is a new service that connects to your various online accounts and consolidates your contacts into a constantly updated online address book, with a single, easy-to-navigate interface.”

All around, it’s a reasonably smart move for LinkedIn — albeit a very small one. We’ve speculated before how LinkedIn might spend the $352 million it raised in its May 9 initial public offering. But of all the acquisitions LinkedIn could have made, shareholders will probably be happy that they’ve made a conservative one, given the larger economy’s current mood of unrest. Financial terms of the deal have not been disclosed, but the fact that Connected has taken on only $500,000 in seed funding and has just two employees — the husband and wife founding team — means the acquisition price was probably relatively modest.

The Connected buy has all the markings of an acqui-hire, but LinkedIn’s spokesman Hani Durzy says that the technology will be integrated into the service in some way: “Connected’s technology and team will help us deliver even better identity and insights offerings to our members and get even more value out of their LinkedIn connections,” he wrote in an emailed statement.

Fair enough. But if LinkedIn is really serious about adding new technologies to help it to retain an edge over quickly growing upstarts like BranchOut, it may have to open its wallet a bit wider — and right now there are a ton of truly awesome startups out there just ready to be snapped up. Making shareholders comfortable in the short term makes sense when you’re a newly public company in a rocky economy — but surely LinkedIn’s top brass knows that in the long term, sometimes you have to take big risks to get big rewards.

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On LinkedIn, green startups are leading the way

Colleen Taylor — Mon, 26 Sep 2011 19:25:03 +0000

Portion of LinkedIn's Infographic (click to enlarge)

On Monday, LinkedIn released new stats about its membership growth, showing that the small business sector is a major player in the larger professional landscape. More than 4.7 million of LinkedIn’s members work for small businesses, according to an infographic published by the company.

And while green startups may have gone through some tough times recently, LinkedIn has seen a major uptick in members who work for small businesses in the industry. From 2009 to 2011, “renewables and environment” was the fastest growing sector within the small business landscape on LinkedIn, with the number of LinkedIn members in the space growing 29 percent in that timeframe. Interestingly, the second-fastest small business growth sector on LinkedIn was “oil and energy,” which grew by 20 percent from 2009 to 2011.

That greentech growth could just add credence to talk that the sector is ripe for a shakeout. But, as my colleague Katie Fehrenbacher wrote recently, there’s still a lot of progress that can be made in the space — if the right people put their minds to it.

Image courtesy of Flickr user Simon Peckham

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Memo to LinkedIn: Copying Facebook has its downsides

Mathew Ingram — Thu, 11 Aug 2011 22:00:56 +0000

Updated: Ever since it went public earlier this year, LinkedIn has been trying to expand — or possibly to justify — the $9-billion market value it was awarded after its initial public offering of shares. Among other things, it has continued to try to mimic aspects of Twitter and Facebook, as it tries to entrench itself as a social network for the corporate market. But it seems to have gone too far in the wrong direction when it comes to copying Facebook: a recent change that opted LinkedIn’s 100-million-plus users into a social-advertising campaign feels a lot like some of Facebook’s past privacy-related blunders, and a questionable move for a company that’s trying hard to become a destination for business users.

The change appears to have actually occurred a couple of months ago, when the service updated its privacy policy. As part of the update, LinkedIn noted which sections had changed, and one of those came under the heading of “advertising.” In a nutshell, as blogger Steve Woodruff appears to have been the first to notice, the policy signed LinkedIn users up by default for a “social advertising” campaign that allows the service to use their profile photos, names and activity in ads based on the content they share with their social graph on the network. The clause states:

In order to deliver relevant and valuable ads to you and your network, LinkedIn may use your name and profile photo in connection with social advertising based on content shared on LinkedIn. This advertising may include the fact that you have recommended or endorsed a product or service on LinkedIn, followed a company, joined Groups or conversations, established or added content to your profile.

To the company’s credit, as security blogger Paul Ducklin notes on the Sophos blog, it at least flagged the changes to the policy, and provided a link to the setting that allows users to opt out of the social-advertising campaign (which is here if you want to opt out). And LinkedIn did describe the changes on its blog at the time — including an offhand reference to the fact that users would all be opted-in to the new service by default — although it described the feature in glowing terms as a way of providing more relevant advertising for businesses and individuals using the network.

Who thought opt in by default was a good idea?

The big question here is: Why did LinkedIn think that opting users in to such a feature by default would be a good idea? Presumably, someone at the company must have noticed how much trouble Facebook has caused by opting users in to services by default — particularly ones that expose their data or profiles or activity on the network to others, and especially ones that do so for the purposes of advertising. The word “Beacon” is probably still spoken only in a hushed whisper around Facebook after the social advertising it tried to implement blew up in the company’s face, and newer versions have also been described by many as “creepy.”

Now LinkedIn has deliberately chosen to put itself in exactly the same position as the larger social network it keeps trying to copy. Many of the responses to the company’s privacy changes use phrases like “Facebook-style stunt” or “pulling a Facebook,” and the overwhelming sense is that — like its competitor — LinkedIn tried to pull one over on its users somehow. Is that really what the company needs right now, especially when it’s trying to justify that huge market valuation? The move may even have broken the law in Europe.

No doubt the company decided that making the new social-advertising campaign opt-out by default, and then trying to convince users to sign up for it later, would be too difficult and/or wouldn’t produce enough of a response. Those are likely the same reasons Facebook made the same decision — but it has suffered for it, and LinkedIn deserves to as well. Not giving users the ability to make that choice before they are signed up shows a disrespect for them that’s hard to ignore.

Is this any way to improve engagement?

While the introduction of social advertising may help the company generate more ad revenue, something analysts have been looking for as they try to decide whether it’s a growth stock or not, one of the other issues LinkedIn has been dealing with is how to improve the engagement levels on the site: in other words, how often users return and how long they spend when they do so. Among other things, it has added a social-news aggregation service called LinkedIn Today as a way of doing that (and some critics say it has also made it unnecessarily difficult to close out your LinkedIn account).

All of which raises the question: Is opting users into a new social-advertising campaign by default — especially one that raises so many obvious privacy issues — really a wise move? If it seems unwise even for a mass-market social network like Facebook to be doing those kinds of things, it seems even more unwise for a service that’s allegedly catering to a sophisticated business customer to do so.

Update: In a blog post responding to the criticisms of its social-advertising campaign, LinkedIn’s director of product management admits that the company “could have communicated our intentions —- to provide more value and relevancy to our members —- more clearly,” and says that the campaign has been changed. The ads that appear on the site will now no longer include the names or photos of users, the company said.

Post and thumbnail photos courtesy of Flickr users Nan Palmero and Josh Hallett

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LinkedIn’s user base skyrockets. Profits, not so much.

Colleen Taylor — Thu, 04 Aug 2011 20:44:49 +0000

Updated. LinkedIn on Thursday announced the financial results from its first three months operating as a public company. Overall the company showed impressive user growth — but that has not started to translate into significantly higher profits.

The Mountain View, Calif.-based company, which runs the world’s largest professional online social networking site, grew to 115.8 million members by the end of the second quarter, an increase of 61 percent from a year ago. And unique visitors grew to 81.8 million per month, a year-over-year increase of 83 percent.

But the company’s bottom line did not follow its audience growth upward. LinkedIn’s net income for the quarter was $4.5 million, a relatively small increase from the $4.3 million it brought in during the second quarter of last year. Top-line revenue, however, did see a significant boost: Net revenue for Q2 2011 was $121 million, more than doubling the $54.9 million in revenue it posted during Q2 2010. In addition, LinkedIn’s Q2 income on a non-GAAP basis, which excludes certain tax charges, was $10.8 million, compared to $6.4 million for the second quarter of 2010.

Overall, it seems that the company is quickly spending its money as soon as it comes in to reinvest in further growth. “We will continue to take a long-term perspective and invest aggressively in the global LinkedIn platform,” LinkedIn CFO Steve Sordello said in a statement accompanying the earnings release.

Update: In an interview with Fortune published Thursday afternoon, LinkedIn CEO Jeff Weiner confirmed that the company is intentionally sacrificing its bottom line profits in the pursuit of faster growth:

Fortune: Earlier in the year, you forecast a potential future loss as you invested in the business. I noticed revised q3 estimates suggest you intend to turn a profit. Has there been any change to your strategy?

Weiner: No. We’re still focused on investing in the platform so we can realize the full potential of LinkedIn. That takes three forms. One is a continuation of investment in our products and creating more value for our members. The second is continuing to scale our technology platform on a global basis. And third is continuing to expand internationally. Well over half our membership now comes from overseas. We’re going to continue to invest in localizing LinkedIn in multiple languages and building out our international footprint in terms of sales offices.

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Bringing Sand Hill Road to cyberspace

Colleen Taylor — Mon, 25 Jul 2011 19:15:47 +0000

For years, the world of venture capital largely has been shrouded in a veil of secrecy. Introductions were made in person over coffee or cocktails, startups were pitched on a physical whiteboard, and deals were sealed with handshakes and eye contact. Even as websites such as Facebook and LinkedIn brought a lot of both casual and professional social interactions into cyberspace, venture funding was still done largely offline. But in the past 18 months, one website has started to change all of that — in a big way.

AngelList started in February 2010 as a simple email list to alert wealthy angel investors to the tech industry’s hot and interesting startups. Since then, the tool has grown at warp speed: It is now a full-fledged social networking site that brings together investors of all sizes with a wide variety of companies looking for funding. Earlier this month I sat down with AngelList co-founder Naval Ravikant to get a look at how the site has grown and where it’s going from here.

The facts and figures Ravikant revealed in our conversation were pretty impressive: AngelList now has 2,300 investors and more than 10,000 companies with registered profiles on the site. The network has directly facilitated between 400 and 600 startup fundraises, and is currently helping with an average of one to two fund raises per day.

The AngelList website now has a number of features reminiscent of social networking or online dating sites, to allow both investors and startups to present their best selves — and separate the signal from the noise when looking for new partners. (Click image to enlarge. One more screenshot is included at the bottom of this post):

The size of AngelList’s community is even more impressive when you take into account that not just anybody is allowed in. “Curation is very important. We keep out the bad actors, and we remove people from the site if they get negative reviews, if they’re people who are just kicking tires or running pay to pitch forums,” Ravikant said. “We’ve removed companies if we couldn’t verify the claims they made about who has already invested in them. And there are also a lot of good companies we can’t send out on AngelList at all. We can’t help everybody.”

The site almost became too popular earlier this spring, Ravikant said. AngelList started to dial back its growth purposefully, partially in response to criticism that the site was helping to foster an overly exuberant angel funding environment. “Actually in February our volume was just insane. We were getting 40 to 60 companies trying to join per day. There was definitely a seed stage frenzy, and we felt the quality was slipping,” he said. “We deliberately locked the site down, we raised the bar and lowered the volume.”

AngelList has no near-term plans to start generating revenue through ads or imposing commissions on the deals it helps facilitate. Ravikant has funded the site’s development with personal money from himself and his co-founder Babak Nivi and an investment from the Kauffman Foundation, a non-profit focused on fostering entrepreneurship. Although I could see AngelList emerging as a logical acquisition for a number of social networking sites such as LinkedIn or larger media companies, Ravikant maintains that he’s not focusing on longer-term strategies at the moment. “We’re still figuring it out, and we’re not in any kind of rush,” he said. After all, if they need fresh funding, they probably know where to go to find it.

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Infrastructure Q2: Big data and PaaS gain more momentum

LinkedIn launches job application plug-in

Colleen Taylor — Mon, 25 Jul 2011 16:37:29 +0000

LinkedIn has launched a new plug-in that allows companies to place an “Apply with LinkedIn” button on their job listings pages. The plug-in allows job hunters to apply for positions using their LinkedIn profiles as résumés.

GigaOM was the first to report on the development of the “Apply with LinkedIn” plug-in in early June. By the looks of it, the plug-in that has been deployed has many of the features we had heard about pre-launch: Companies can customize the look of the button, add up to three specialized questions, prompt for a cover letter, and utilize certain data tracking technologies.

Now any company can embed the plug-in by adding an eight-line code snippet to its corporate website, LinkedIn said. More than a thousand companies are participating in the plug-in’s launch by including the Apply with LinkedIn button on their job pages, including Netflix, TripIt and Photobucket.

In a post published on LinkedIn’s corporate blog Monday morning, technical project manager Jonathan Seitel explained the service from the job applicants’ perspective this way:

Once you click on the “Apply with LinkedIn” button, you’ll get a user experience that’s been optimized for the web. In addition to updating your profile real time, LinkedIn will also show you your professional connections that work at the company to increase your chances of getting hired through a referral.

If you don’t know anybody at the company, we’ll show you people who can introduce you to someone there. This is extremely powerful –- statistics show that referrals are the #1 source of external hires at companies.

Finally, we record all “Apply with LinkedIn” submissions in the “Saved Jobs” tab (under the Jobs category on LinkedIn) so you have a record of all the jobs you’ve applied to around the web, throughout your career.

Here is a YouTube video explaining how “Apply with LinkedIn” works:

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LinkedIn outbox like a broken record? Tout has an app for that

Colleen Taylor — Sat, 16 Jul 2011 00:18:23 +0000

Whether we like it our not, email takes up a significant portion of every workday. Most email outboxes take after the 1993 movie Groundhog Day, where Bill Murray’s character wakes up day after day to find it is February 2nd all over again. In the same way, many white-collar workers end up sending slight variations on the same email over and over again.

That kind of drudgery is exactly what a new startup called Tout is trying to eliminate. As WebWorkerDaily’s Simon Mackie reported last month, Tout’s app allows users to create email templates and schedule and send those emails through a unified dashboard. The app also allows users to monitor the effectiveness of different email templates through a fairly comprehensive analytics system.

It’s a fantastic idea, but at its launch Tout only plugged into a user’s Gmail and Twitter contacts. But many people in fields like sales and marketing use LinkedIn for a good chunk of their lead generation efforts — a lot of cold calling these days is done via electronic messaging.

That why Tout’s new integration with LinkedIn could be a major boon to a number of the app’s potential power users. Now, all of a users’ LinkedIn connections are available within Tout, and users can send LinkedIn messages directly from the app, according to a blog post published Friday by Tout’s founder Tawheed “TK” Kader. Tout can also integrate with such CRM applications as Highrise, CapsuleCRM and Batchbook.

Utilizing Tout’s template services within LinkedIn could be a huge time saver for a lot of people in communication-heavy fields. Overall, this could be the feature that helps the Tout app take off in a real way.

Here’s a video from Tout explaining how the integration works:

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The competitive prospects of Google+

David Card — Thu, 07 Jul 2011 22:40:56 +0000

Google+ looks like Google’s best effort yet in social media. To get a handle on industry reaction to Google+, we did a quick survey over the Fourth of July weekend of 451 GigaOM readers on Google+’s chances for success, its competitive weapons and its likely impact on other social companies. In a new research note at GigaOM Pro (subscription required), we analyze the results.

Why does asking GigaOM’s readership make sense? Because, as we suspected, they’re radically early adopters, as the 69 percent of respondents that said they’ve tried Google+ shows.

Source: GigaOM Pro

We asked this early adopter audience what kind of impact they expected Google+ to have on the competition. What did they think? As shown in the chart above, survey respondents think Google+ will have the biggest impact on Facebook and Skype, while companies like Twitter and LinkedIn won’t feel as much heat.

Why Facebook and Skype?

A few select quotes from the survey’s open-ended responses (the best of which are in the research note)* may give you a clue.

On Facebook

“Google+ has the potential to be a Facebook without the ‘my life is better/worse than yours’ component. Instead, it can shift the focus from digitally stalking your ‘friends’ to making authentic human connections how and with whom you choose.”

On Skype

“Google+ makes video chat an obvious choice rather than a secondary offering just to remain competitive. Initiating a hangout is intuitive. Combined with Circles, Google+ can be a place to share information with friends, family, and coworkers — even as a place to get work done — that moves the ‘social network’ idea to the next logical place.”

That’s not to say that Google won’t have to work hard to compete in the social media space, and the company’s past flops in this area only underscore that fact. For more on Google+’s competitive outlook, and to see more of the survey results, read the full research note at GigaOM Pro.

*To protect the identities of the respondents, we have not included names with any of the quotes.

Disclosure: Automattic, the maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, the founder of Giga Omni Media, is also a venture partner at True.

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The afterlife: When founders leave

Colleen Taylor — Wed, 29 Jun 2011 20:30:07 +0000

Twitter co-founder Biz Stone officially announced Tuesday his plans to step away from Twitter’s day-to-day operations. While it’s a move that many folks in the industry have seen coming for months now — Stone has spent more time outside the office as Twitter’s public face in press interviews and vodka commercials — his official departure has still garnered its fair share of headlines and a few raised eyebrows.

That’s partly because of how important founders are. As GigaOM’s Katie Fehrenbacher has put it, the “founder” title is an especially weighty one here in the tech industry. I talk daily with startup executives who refer to their companies as “my baby.” Naturally, a lot of people see walking away from a startup as a bit of an abandonment– especially before the company has seen an exit.

But Stone’s decision is not at all unique among his peers. Twitter’s other co-founders, Evan Williams and Jack Dorsey, have scaled back their involvement with the site to focus on their own respective projects. And the guys at Twitter are certainly not alone in taking a step back from the company they’ve helped build.

A founder’s nature is essentially creative. He or she often enjoys the fast-paced life of a bootstrapped, pizza-and-beer, tiny startup. But when employee numbers start doubling, more money gets raised, and things like HR and 401Ks become necessities, founders often times yearn to jump ship for the more creative early-stage life again. At the same time, there is the rare founder that can make the transition to lead the bigger company as the CEO.

Here’s a look at where founders from some of the tech industry’s biggest players have ended up:

Apple
Apple was co-founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. Wayne reportedly gave up his Apple shares fewer than two weeks after the company was founded for $2,300. Wozniak ended his full-time work with Apple in 1987. Jobs resigned from Apple in 1985 amid corporate power struggles, and rejoined the company 11 years later.

Google
Google was co-founded in 1998 by Larry Page and Sergey Brin. Both continue to hold full-time executive and board roles at the company.

Groupon
Groupon was launched in 2008 as a spin-out of ThePoint, a website co-founded in 2007 by Andrew Mason and Eric Lefkofsky. Mason continues to serve as Groupon’s CEO; Lefkofsky, who has several other ventures, serves as the company’s chairman. Both founders have been criticized for using funding rounds to cash out portions of their stakes in the company.

Facebook
Facebook was co-founded in 2004 by Mark Zuckerberg, Eduardo Saverin, Dustin Moskovitz and Chris Hughes. Zuckerberg has remained at the company as CEO; Saverin stopped working day-to-day with the company in 2004; Moskovitz left Facebook in October 2008 to co-found Asana, and Hughes left Facebook in 2007 to lead Barack Obama’s online campaign efforts.

LinkedIn
LinkedIn was co-founded in 2003 by Reid Hoffman, Konstantin Guericke, Allen Blue, Eric Ly, and Jean-Luc Vaillant. Hoffman stepped down from the CEO role in 2007, and he remains the company’s executive chairman. Guericke and Ly both left their full-time roles at LinkedIn in 2006. Blue works full-time role as LinkedIn’s VP of product management, and Vaillant has retained his role as the company’s CTO.

Microsoft
Microsoft was co-founded in 1975 by Paul Allen and Bill Gates. Allen stepped away from day-to-day operations at the company in 1982 after being diagnosed with Hodgkin’s lymphoma, which he treated with radiation therapy. Allen stepped down from Microsoft’s board of directors in 2000. Gates stopped being CEO in 2000, and announced plans to step down from day-to-day operations in 2006; he remains Microsoft’s chairman.

Yahoo
Yahoo was co-founded in 1995 by Jerry Yang and David Filo. Yang announced he would step down from a short stint as CEO in 2008, but remains on the executive roster as a “Chief Yahoo” and has a spot on the company’s board. Filo also continues to work with the company as a “Chief Yahoo.”

Do you have any thoughts on whether a founder’s presence is crucial to a company’s success? If so, let us hear them in the comments.

Image courtesy of Flickr user clicksense.

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LinkedIn’s post-IPO offerings and opportunities

David Card — Wed, 29 Jun 2011 18:45:08 +0000

A month after its debut as a public company, Wall Street seems to love LinkedIn, as evidenced by analysts predictions this week. Nor is the professional social network resting on its laurels post-IPO. The company has introduced several new initiatives over the past six months, and in June, it made moves that include testing a new, social ad format, hiring a journalism pro to help with content initiatives and adding syndication features to its jobs platform.

These moves are geared to increase member usage and value for advertisers, and here’s what each might bring to LinkedIn’s overall growth strategy:

Social ad format: Borrowing an idea from Facebook ads, LinkedIn is testing a new format that uses information from a user’s network connections and activities to serve them more targeted ads. An example of this might be a recruiting ad that includes contacts at the company that could refer the user. With this initiative, the company is smartly tapping into its professional contact information to raise its advertising value — and presumably price. LinkedIn is, however, being pretty sensitive about potential privacy concerns here: It enables users to opt-out of these ads and it hides the data from the advertiser.
News and content: LinkedIn hired Daniel Roth, Fortune’s digital editor, to work on LinkedIn Today as well as other content projects. A few savvy editors can help with LinkedIn’s news curation and aggregation strategy more efficiently than hiring a lot of original content creators. Similarly, the company is adding sharing integration with SlideShare and creating a SlideShare section for Today as it hopes to leverage user-generated content and professional connections toward its aim to increase usage frequency and duration.
Job application plug-in: Sites will soon be able to add an “Apply with LinkedIn” button to job postings on their websites. This is a much more logical LinkedIn platform plug-in than product or content recommendations. It could encourage wider LinkedIn sign-in service adoption, and contribute to LinkedIn’s objective of housing a user’s professional identity: the LinkedIn profile as identity and resume.

Despite these new offerings, LinkedIn nonetheless faces fierce competition from Facebook, Google and Twitter when it comes to leading in the social media space. Those sites have better access to information about people’s interests, which is more widely useful for advertising and shopping. But LinkedIn’s best chance to establish its APIs and technology platform is as a professional-identity authenticator, meaning LinkedIn could give its members the digital equivalent of a business card, but with the trusted authority of the LinkedIn name behind it. Besides professional relationships — hiring, of course, but also buying, selling and sales leads — such an authenticated identity could play a role in contracts and payments systems.

LinkedIn has its work cut out for it competing. It will have a hard time adding yet another recommendation button on sites, so its sign-in feature could be the most appealing part of its platform, especially for companies offering information about business content and services, travel or technology. I go deeper into LinkedIn’s post-IPO strategies in a new research note at GigaOM Pro (subscription required).

Image courtesy of flickr user nan palmero

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Wall Street’s LinkedIn forecast: Sunny. Very sunny.

Colleen Taylor — Tue, 28 Jun 2011 20:00:40 +0000

Analysts at Wall Street’s major financial firms initiated wholesale coverage of LinkedIn on Tuesday, putting forth their opinions of the company’s future growth prospects and estimates for how the stock should perform. Their predictions for LinkedIn? In a word: Bullish.

At its May 9 initial public offering, LinkedIn’s stock priced at $45 per share, but the shares quickly surpassed that within seconds of its market debut. For the past couple of weeks, LinkedIn’s stock price has generally hovered between $65 to $75, giving the company an average valuation of around $6.5 billion — not bad at all for a firm that made $2 million in net income on $250 million in gross revenue last year.

But some of Wall Street’s most powerful analysts think the stock should be trading at significantly higher valuations. In reports issued Tuesday, Bank of America Merrill Lynch analysts priced LinkedIn’s 12-month price target at $92 per share; UBS analysts’ 12-month price target is $90 per share; Morgan Stanley’s 12-month target is $88; and JP Morgan’s 12-month price target is $85. It bears mention that Bank of America Merrill Lynch, Morgan Stanley, and JP Morgan all acted as underwriters for LinkedIn’s IPO; however, the SEC mandates that banks maintain total separation between their equity research and investment banking operations.

The street heard the analysts’ predictions loud and clear. LinkedIn’s stock closed Monday at $76.38 per share, and on Tuesday, the price popped: The stock opened at $81.40 and jumped up to $86.03 within the first 40 minutes of trading. At 2pm EDT Tuesday, the stock was holding steady at $84.06.

Why the bullish outlook? The analysts pointed to several key factors:

Big opportunities for user growth.
With 100 million members, LinkedIn is far from reaching its saturation point, according to analysts. JP Morgan’s report reads, “LinkedIn’s 100 million member base implies just a 16% penetration rate of the worldwide professional market… We are projecting LinkedIn’s member base to reach more than 250 million by the end of 2015, which would suggest a 42% penetration rate off the current professional market.”

Diversified revenue streams.
Wall Street hates it when a company has all its eggs in one basket. All the analysts expressed satisfaction in the fact that LinkedIn gets its money from three distinct verticals: Hiring solutions (commissions on jobs sourced through LinkedIn), Marketing solutions (online ads), and premium subscriptions.

Online advertising is poised for a boom.
And analysts see LinkedIn as well-positioned to benefit from it. The UBS report reads: “We are bullish on the online advertising opportunity for LNKD, and note that user time spent online is disproportionate to the overall online ad spend. Roughly 28% of time is currently spent online, but the online ad spend accounts for only ~13% of the total spend, representing a roughly $50B global opportunity.”

LinkedIn is generally destined for greatness.
At least according to Morgan Stanley’s report, which waxed rhapsodic about the company’s potential: “Every once in a while, a company comes around that transforms an industry in such a way that investors have difficulty grasping just how big it may one day become. Amazon.com, the $85B book retailer; Google, the $150B blue link company; eBay, the $40B beanie baby company, and Netflix, the $13B DVD-by-mail company … we believe LinkedIn can be one of these companies.”

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