Social Net For Grown-ups LinkedIn Hits Inflection Point; Profitability

PayPal alum Reid Hoffman and LinkedIn get the Business 2.0 treatment … The privately held company claims to be profitable and expects to hit $100 million in revenue by 2008; Sequoia Capital and Greylock invested nearly $15 million in the company, which launched in 2003 about six years after the initial notion by Hoffman and Konstantin Guericke. Where does the money come from? Among other sources, 60,000 recruiters average about $3,600 a year in premium spending; corporate member pay six-figure fees. LinkedIn had passed 500,000 members the first year and hit 4.4 million by 2005; which wasn’t fast enough. It has about 8 million members.The B2.0 hook is the way LinkedIn helps match investors and start-ups a la Hoffman and Flickr. LinkedIn deals like that and other business hook-ups through the service plus its invite-up nature account for the social network’s switch from shrug to must. Recruiters account for 10 percent of the membership; one example is a Microsoft recruiter who is directly connected to 3,500 people, which ostensibly gives him access within three degrees of about 3.5 million people. (A San Jose-based recruiter claims more than 28,000 connections.)
— LinkedIn is adding features like servioce recommendations. It also plans to expand globally and already has 4 million-plus members outside the U.S.
— B2.0: “There is competition – Spoke, Ryze, and newcomer Hoover’s Connect – but for the moment, it’s LinkedIn’s market to lose.”
— Hoffman has angel invested in more than 40 startups; among them Digg, Facebook, Six Apart. He thinks LinkedIn could be bigger than Facebook: “It will piss those guys off for me to say it, but if we can tip successfully, we are massively more valuable than Facebook – and I mean a multibillion-dollar business.”