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LinkedIn – The Leader at a Crossroads

ET Cases, 9 Pages
AUTHOR(S) : Arijit Bhattacharya, Faculty Member, IBS, Mumbai

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LinkedIn – The Leader at a Crossroads


In November 2016, Akshay Kothari (Kothari), the 30-year-old Country Manager and Head of Product, LinkedIn India, was in a pensive mood. Ten months have passed after he took over in January 2016 to spearhead the operations in India, the largest market for the company after US.

Kothari was immersed in formulating product specific strategies on how to retain LinkedIn’s competitive advantage and to maintain its leadership position in a highly competitive market especially after the launch of ‘Facebook at Work’. He was apprehensive about the growing acceptance of this enterprise solution among the corporates as it could be a cause for concern in the long-run. In addition, after being taken over by Microsoft, how could it retain its independence and entrepreneurial zeal instead of succumbing to the will of the parent IT giant?

Clearly, there was no immediate or black-and-white answer to these questions but does that mean one should to proactively search for the answers? Or, still being the leader in the market, was he simply overreacting by a competitor’s move?

Through the glass window of his office in the corporate headquarter of LinkedIn India in the DLF Cyber City, Gurgaon, Kothari looked outside and started taking stock of various factors that will play a role in the next phase of growth in the world’s fastest growing major economy........

Professional Networking Industry

Professional networking has been growing over the years. Globally, the online professional networking landscape is dominated by LinkedIn. Few other prominent global players are (Exhibit I):..............

Background of LinkedIn

LinkedIn Ltd was a Delaware, US based technology start-up founded by Reid Hoffman, Allen Blue, Konstantin Guericke, Eric Ly, and Jean-Luc Vaillant in 2002. It was positioned as a professional networking platform for individuals seeking career growth or businesses looking for growth opportunities. In January 2005, it changed its identity to LinkedIn Corporation and in June 2011, LinkedIn was listed in New York Stock Exchange to launch its Initial Public Offer (IPO) and started trading under the name LNKD............

Financial Health and Questionable Business Practice of LinkedIn

In 2015, LinkedIn posted a loss of $166 million against revenue of $2.9 billion. LinkedIn’s stock price plummeted more than 40% after it forecast weaker-than-expected growth for the year.8 This devaluation of stock posed further problem for LinkedIn due to its overreliance on stock-based on compensation. LinkedIn, for many years, had not followed the GAAP (Generally Accepted Accounting Principles) and instead used adjusted EBITDA (Earnings Before Interest Tax Depreciation Amortization) or non-GAAP earnings............

Acquisition of LinkedIn by Microsoft

On June 13th 2016, LinkedIn was acquired by Microsoft for $26.2 billion in cash at $196/share, approximately 47% premium over the previous trading price of $133. After the merger, in a joint statement both companies informed “LinkedIn will retain its distinct brand, culture and independence”. Jeff Weiner, remained the CEO of LinkedIn, but reported to Satya Nadella, CEO of Microsoft........................

LinkedIn India

In 2009, LinkedIn had 3.4 million subscribers in India. In 2017, LinkedIn India boasts of 42 million user base. Also, it was the second largest market by user base after the US (130 million users)..........

LinkedIn India – Innovative Strategies

Apart from focusing on its traditional three pillars of revenue streams, in India, LinkedIn experimented with many innovative measures to penetrate the Indian market and to increase engagement with the target group of professionals and students (Exhibit IV).........

Competitive Threat from ‘Facebook at Work’

On November 17th 2014, when the news of the Facebook’s pilot project ‘Facebook at Work’ was announced, LinkedIn’s share price dropped by 4.3% to $223.71. The new enterprise solution was both a mobile app and a desktop service. It went into a pilot test around January 2015...............

Challenges for LinkedIn

LinkedIn had been consistently improving its social network and adding features to enhance its effectiveness and popularity after Microsoft’s acquisition of the company. But, the question remains whether it was a case of ‘too little too late’. Industry experts were skeptical whether LinkedIn would be able to manage the transition of the post-merger culture fit smoothly and whether in future its strategies will be dictated by the parent company...............

Assignment questions

I. Discuss the impact that LinkedIn’s questionable accounting practices had on its business globally and in India? What, according to you, should LinkedIn do for ‘reputation management’ in view of its questionable accounting practices?
II. .................


Exhibit I: Global Players in the Professional Networking Industry

Exhibit II: Acquisitions by LinkedIn

Exhibit III: Business Model of LinkedIn

Exhibit IV: LinkedIn India’s Experimental Initiatives

Teaching Note Preview

LinkedIn – The Leader at a Crossroads



The case study focuses on the leader in the online professional networking domain LinkedIn and what strategies should it adopt in the face of competition to retain its leadership position. It gives an overview of the industry and its players and then focuses on the evolution of LinkedIn to its present form. This case has chronicled the business strategies, product range, business environment and competitive threats faced by the company. The teaching note includes case positioning, prerequisite reading, board plan and detailed analysis of assignment questions.

Prerequisite Reading

Basic understanding of nature and types of competitive strategies

Case Positioning and Setting

This case study can be used in the MBA/Post-graduate program in the course of marketing in the class of strategic management.

Assignment Questions

I. Discuss the impact that LinkedIn’s questionable accounting practices had on its business globally and in India? What, according to you, should LinkedIn do for ‘reputation management’ in view of its questionable accounting practices?

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LinkedIn, the undisputable market leader in professional networking domain, both globally as well as in India, was faced with decision dilemmas in multiple fronts. Firstly, the company had been taken over by Microsoft in December 2016 and it remains to be seen how things unfold for LinkedIn and how it fits with larger scheme of the IT giant. Secondly, in India, LinkedIn’s second largest market after US, the company was under pressure because of the competition from the Social Media giant, Facebook, in the form of ‘Facebook at Work’ targeted at big enterprises – a segment which was the most lucrative segment in terms of revenue for LinkedIn over the years. Though, the company was trying its best to react with a slew of product launches, many industry experts felt that LinkedIn was gradually slipping from its leadership position. This case study tracks the evolution of the company since its inception to its present form, its competitive position and present challenges in a dynamic and ever-changing business environment.

Pedagogical objectives

To understand the competitive strategies adopted by a troubled company in a competitive environment.

Case positioning and setting

This case study can be used in the MBA/Post-graduate program in the course of Marketing in the class of strategic management.

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