The Risks of the LinkedIn Corporation

On January 27, 2011, LinkedIn Corporation has delivered a registration statement following it’s announcement to do an IPO.

The complete document can be found here.

And as part of the requiremets LinkedIn Corporation, has mentioned the risks. It’s interesting stuff to read.

<quote>
Risks Associated with Our Business

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. Some of these risks are:

• we have a short operating history in a new and unproven market, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful;
• we may not timely and effectively scale and adapt our existing technology and network infrastructure to ensure that our website is accessible at all times with short or no perceptible load times;
• if our security measures are compromised, or if our website is subject to attacks that degrade or deny the ability of members to access our solutions, members and customers may curtail or stop the use of our solutions;
• our core value of putting our members first may conflict with the short-term interests of our business;
• the number of our registered members is higher than the number of actual members, and a substantial majority of our page views are generated by a minority of our members;
• we process, store and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and changes in these regulations or our actual or perceived failure to comply with such obligations could harm our business;
• 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;
• we expect to face increasing competition in the market for online professional networks; and
• the dual class structure of our common stock has the effect of concentrating voting control with those stockholders who held our stock prior to this offering.
  <unquote>

A few interesting remarks:

• they don’t know how many members there actually are
• the most page views are generated by a minority
• if business will decline there core value of putting members first will be at risk

What do you make of it?

Big Hug,
Jan