Where LinkedIn is headed next

ADAM LASHINSKY:  Okay, so extremely exciting time here a year after your IPO.  IPOs are all the rage again with Facebook’s IPO.  Silicon Valley is all the rage again, everything from Facebook to Google to LinkedIn to Yahoo!, which you know something about.

So, where I want to start is a year into the IPO what’s it like being a public company?  How is it different from before you were a public company?

JEFF WEINER:  So, it’s one of the questions I’m asked most often, what’s been the biggest surprise now that you’re public, and the biggest surprise has been that there haven’t been any big surprises.  And that was very much by design.

Before we went public, I was getting a lot of advice and talking to folks who had already been through the process, and one of the things that we really tried to make sure we were true to was the same kind of company we were as a privately held company.  And we took the time to reinforce our culture, our values.  We went so far as to codify that as actually part of the filing.

And more important than —

ADAM LASHINSKY:  The securities filing you mean, when you went public?

JEFF WEINER:  Yeah, exactly, the registration.

And more important than writing that kind of stuff down is walking the walk, and making sure that we remain true to who we are.  And I think that really begins with continuing to pursue the long term vision as opposed to making short term compromises as a result of being public.

I think there were some other things working in our favor.  We have an extremely capable team with regard to G&A, finance, legal, the kind of stuff that you really need to get right as a public company.

And so to some extent we were operating internally as a public company with the right kind of controls, processes, tempo that you would expect a public company to be operating with.

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ADAM LASHINSKY:  Right now everyone who’s watching the Facebook IPO is all bent out of shape over the fact that it didn’t perform well, then the stock went down.  Now, your stock doubled at the very beginning, and since then it went down quite a lot, and went up quite a lot.  And so are you saying that that volatility in the stock price in the public markets had no impact on people’s behavior or thinking inside LinkedIn?

JEFF WEINER:  That’s what I’m saying.  Now, it may be hard to believe on the outside looking in, but one of the things that’s essentially become our unofficial mantra is this notion of next play.  And for those that don’t know, Coach K, Duke Blue Devils, incredibly successful coach, like or dislike the Duke Blue Devils, they’ve had amazing success.  And every time they go up and down the court, Coach K, unbeknownst to most people outside of the team, shouts next play, because he doesn’t want the team lingering too long on the play that just took place, regardless of how positive the outcome or how negative the outcome.

And so from the moment we filed, we actually ended that all hands with next play.  When we went public, when we rang the bell, we had an all hands and after the all hands we distributed t-shirts, and on the back was next play.

This whole notion of, look, this is a special moment, let’s appreciate how far we’ve come to get here, but at the end of the day this is a stepping stone on our way towards realizing the long term potential of the company.  And as a result the short term fluctuations and volatility in the stock price, that’s not what’s important.

ADAM LASHINSKY:  Let’s stick on the current state of play for a moment.  You’ve got three primary revenue streams.  Would you just tick through them and explain them briefly?

JEFF WEINER:  Sure.  So, Hiring Solutions.

ADAM LASHINSKY:  Hiring Solutions is?

JEFF WEINER:  The largest and fastest growing that enables recruiters to come on LinkedIn and find the ideal candidate, and conversely it enables jobseekers to find their dream jobs.

ADAM LASHINSKY:  And they’ll pay — and particularly recruiters will pay money, because they’re going to get — they get a higher level of service as recruiters than an individual who just puts a profile up on LinkedIn?

JEFF WEINER:  Yeah, recruiters are paying for unlimited access to the entire repository.  They’re paying for access to tools that you can’t otherwise get in the free ecosystem.   An example of that would be what we call Recruiter, which is our flagship recruiting product, and that enables recruiters to do unlimited searches, share the results.  We’ve now added an additional service to that called Talent Pipeline, which enables recruiters to manage the pipeline of prospects that they’re finding either on LinkedIn or off LinkedIn, job posts, a social layer on those job posts, so people can see who they know within a company that they’re applying to up to 3 degrees to get their foot in the door.  We enable recruiters who are not at larger companies with larger budgets to purchase a subscription package so when they post a job they can get recommendations, et cetera.

ADAM LASHINSKY:  And then job postings are another revenue stream.  That’s not just for recruiters but for companies as well?

JEFF WEINER:  Well, that’s part of Hiring Solutions.  So, that would all come under the Hiring Solutions umbrella.

Then we have Marketing Solutions or ad sales.  And our primary focus there is business-to-business, so enabling companies that want to reach out and target professionals.  Our professional audience by composition is one of the most affluent, most influential and best educated on the consumer web.  And so it’s a really effective way for a company to reach out and target potential prospects, target potential employees.

And we’re having a lot of success with our new Company Follower model.  We have over 2 million active company profiles on LinkedIn, which a lot of people don’t realize.  Companies like IBM have over half a million followers already, and now they can target those followers with specific messages, introductions of new products, whitepapers with knowledge and expertise, and they can build a rapport with these highly valuable individual professionals.

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Similarly, we’ve been doing some interesting stuff with Citi with regard to custom groups.  They just created a new custom group for professional women, so they can network with one another.

And on top of that we’ve added a special edition of LinkedIn Today, which packages relevant headlines and news targeting the women in that particular group.

So, those are examples of the kinds of marketing solutions that we’re focused on right now.

ADAM LASHINSKY:  So, up till now in LinkedIn’s history it’s been the kind of tool that people have gone to when they needed it and then they’ve left to go to something that’s let’s say more broadly entertainment oriented.  Are you succeeding in getting people to stay on LinkedIn longer during the course of the day, and is that a goal?

JEFF WEINER:  Time spent has never been the primary objective.  As we like to say, LinkedIn is not a service that enables you to pass the time, it’s a service that enables you to save time.  And that goes back to our mission, which is to connect the world’s professionals to make them more productive and successful.

So, ultimately would we like our membership to become more engaged, yes, as a proxy for the value that we’re delivering to them on a daily basis, and that’s why we’re introducing products like LinkedIn Today, that’s why we have over a million groups now servicing LinkedIn members within a professional context.  Our new iPad application and our applications for smart phones continue to drive that everyday behavior.

ADAM LASHINSKY:  But you keep coming back to the word “professionals.”  LinkedIn is about professional behavior, right, not social behavior, not fun behavior, with the exception that people are allowed to have fun at work, right?

JEFF WEINER:  Solely and exclusively focused on a professional context, which is one of the things that really sets LinkedIn apart from other social platforms.  You know, our focus is on enabling professionals to connect with one another, to create and share their professional identities, to build their professional networks, to tape insights that professionals are sharing through information, knowledge, expertise, and that’s our value proposition.

ADAM LASHINSKY:  You know, I want to ask you something tied to this recent debacle with the CEO of Yahoo!, Scott Thompson, who eventually left because it turns out that his bio wasn’t accurate.  I’ve always thought of LinkedIn profiles as being a highly accurate source, because people typically won’t lie about things that they are putting out in the public that they know are easily checkable.  But I want to ask you is that right and is there anything that LinkedIn does to ensure the accuracy or to stop fibbing on LinkedIn profiles?

JEFF WEINER:  You are right, your instincts were right, and it goes beyond that kind of anecdotal sensibility.  There was recently a study done that looked at resumes for accuracy and compared them with the accuracy rates of LinkedIn profiles, and for exactly the reason you mentioned once it’s out there in the public sphere not only are people going to be a lot more cautious about how they’re representing themselves and making sure it’s accurate, but you’ve got a self-policing mechanism, and that’s exactly how it works.

So, any individual member on LinkedIn has the ability to flag content on LinkedIn that they believe is inaccurate or a misrepresentation of whatever the underlying information is about, whether that’s an individual’s profile, a company profile, et cetera.

ADAM LASHINSKY:  Are there any companies out there who are still reluctant to have their employees put company information in their LinkedIn profile?  Is there any concern about secrecy or security from the corporate perspective?

JEFF WEINER:  Yeah, I think there’s an important distinction between sharing professional information in the public sphere and privately shared professional information, and we’re trying to make it very clear where that distinction lies and then provide the tools and services to add value in both areas.

So, historically LinkedIn has largely been about publicly available professional information and knowledge and your professional identity, but internally here at LinkedIn we have a private company group and only LinkedIn employees — and this is through LinkedIn.com — only LinkedIn employees have access to that group, and so can share privately available information.  And I personally find that an extremely valuable way to take the pulse of our company.

So, we’re trying to build on that and figure out what tools and services we can begin to offer all of our members and all of the companies that leverage LinkedIn.

JEFF WEINER:  So, that’s an internal beta product but we have started to roll out some tests and some pilot programs where we’re digesting the publicly available information.  So, say all of the employees of a particular company are sharing information publicly, we can now digest that information and send that digest to all the employees who have been authenticated with an official company or corporate e-mail address, so they can see what other employees of that company are sharing, their status updates, where their comments and dialogues are taking place.

And really that’s just the beginning; there’s a lot more we can do in this respect.  And part of the reason I think we can offer so much value there is it goes back to this notion that companies already have a good portion of their employee base on LinkedIn.

You know, historically one of the discussions we’ve had is how much should we pursue this opportunity of helping to power the corporate directory through our APIs, and one of the things we’re increasingly finding is that employees are turning to LinkedIn publicly, to LinkedIn.com publicly as their corporate directory to look up people within their company and see who they are and what they do.

JEFF WEINER:  So, we’re very fortunate in that respect insofar as we have three diverse and scalable business lines:  Hiring Solutions, Marketing Solutions, and premium subscriptions.  And with regard to Hiring Solutions and premium subscriptions, mobile more likely than not will be accretive, because it’s just another channel through which we can add value for the products and services our members are already paying for.

So, in that respect we’re in a somewhat —

ADAM LASHINSKY:  Because you can make me happier as a subscriber by giving me another way to use the product, not necessarily getting any more money from me?

JEFF WEINER:  That’s exactly right.

Now, in terms of true accretion there may be new premium subscriptions packages that we can roll out that would be specific to an iPad environment or a mobile environment, so stay tuned for that.
And then with regard to ad sales and Marketing Solutions specifically it’s important to draw a distinction between the iPad environment and the tablet environment where you have more real estate, and the smart phone where you have limited real estate.

The iPad and more broadly defined tablets have enough screen space where you can take web-based marketing solutions and start to bring those web-based marketing solutions into the tablet environment, which we’re going to start to do.

ADAM LASHINSKY:  So, you haven’t done it yet, you’re working on it.

Then with regard to the smart phone we’re going to start testing various solutions.  And one of the things that we have as an asset is this whole notion of a feed, because one of the reasons it’s been so challenging for traditional display-based advertising to work in a smart phone environment is just again because of that limited real estate and where people’s attention is focused.

ADAM LASHINSKY:  Tell me about outside the United States.  Where are you and where aren’t you?

ADAM LASHINSKY:  Twenty-five cities.

JEFF WEINER:  Twenty-five cities around the world in terms of local presence.  We’re in 17 languages where the site’s been fully translated.  We have major operational hubs in all major regions of the world:  Europe, Asia-Pacific, Latin America.  And with regard to our overall composition, our membership is about 61 percent internationally comprised, and revenue is about 36 percent.

Our revenue, the percentage of our revenue that’s internationally comprised has been steadily growing as we’ve continued to invest more in our local sales and local marketing efforts, but ultimately the goal is to continue to close the gap between the 36 percent of revenue that comes internationally and the 61 percent of members that come internationally.  And we’re going to continue to be able to do that by building out our presence in these local markets, and continue to invest in developing markets, developing countries.

JEFF WEINER:  Yeah, from revenue and member perspective certainly Europe is our largest region outside the United States from a monetization perspective.  The UK is a big country for us.  The Netherlands is the most engaged LinkedIn country in the world.

ADAM LASHINSKY:  Really?  Why?

JEFF WEINER:  Well, a few different reasons.  They’ve got just a cultural history there of a marketplace orientation.

JEFF WEINER:  That’s right.  They’ve got a number of multinational companies, truly multinational companies who are headquartered there.

Other standouts for us around the world, India is our second largest country with regard to members, and we have a growing business there.  They’re doing well.

ADAM LASHINSKY:  And how is East Asia and Southeast Asia?

JEFF WEINER:  Yeah, so we have an operational headquarters in Singapore that we recently opened, a lot of momentum there.  Australia has been a real highlight for us in terms of monetization.  Southeast Asia is starting to come on strong, still very early days there.

ADAM LASHINSKY:  In English or in like Vietnamese and what?

No discussion of Asia-Pacific would be complete without China, and despite the fact that we have yet to translate into Mandarin, we’re English only in China, we still continue to see very strong growth there as well.

ADAM LASHINSKY:  And will you go into Mandarin?

JEFF WEINER:  We want to be very thoughtful about the way in which we approach that marketplace.  Certainly the vision for LinkedIn to create economic opportunity for every professional is very consistent with the goals of China right now in terms of economic stability and job creation.  And so we think it represents a very exciting opportunity and we’ll see.

JEFF WEINER:  Yeah, I think we could.  I think one of the things, the pleasant surprises of Europe for us has been the rate with which we’ve seen cultural changes in terms of recruiting activity.  So, historically you’d see very little in the way of internal recruiting teams going out and looking for folks, as opposed to outsourcing that to third parties.  And with the LinkedIn platform these recruiters now have the opportunity to recruit passive candidates at scale in a way that’s never really been possible.  When we talk about passive candidates, we’re drawing a distinction between people who are in a job and not actively looking for work versus active candidates where they’re submitting their resume.

And so that’s been a very pleasant surprise for us in Europe over the last couple of years.  We’ve seen a pretty material shift in behavior there, and I think that’s going to continue to be the case for some time to come.

JEFF WEINER:  So, with regard to acquisitions historically we have focused more on smaller acquisitions that would be easier to digest from an integration perspective.  I think at the end of the day it’s all about the ability to integrate successfully in terms of creating value through those acquisitions.

We’ve looked for companies that not only have had talent, which would be a great addition to the team, but also technologies or products that would help accelerate our roadmap and product strategy.

And our most recent acquisition was SlideShare.  SlideShare is a platform that makes it easy for professionals to share content through presentations and other mechanisms, video, for example.  That’s the largest acquisition we’ve done to date, roughly 50 people operating in two offices, San Francisco and Delhi, and we’re very excited about the fit there.

ADAM LASHINSKY:  So, speaking of acquisitions, you know, my pet project is to have Microsoft buy LinkedIn because it makes no sense to me that Outlook and LinkedIn aren’t the same thing.  Are you prepared to do that deal when they make that offer?

JEFF WEINER:  I was not aware that was your pet project.  This is good to know, okay.  (Laughter.)

So, we already have some lightweight integrations there with Outlook, so that Outlook is leveraging LinkedIn APIs, so when you’re receiving an e-mail you can see whether or not you’re connected to that person, you can also see their most recent status updates.  And we think there’s some exciting opportunities and potential there to go deeper, so keep an eye on that space.

ADAM LASHINSKY:  So, explain what’s the scenario.  Who would I want to integrate my calendar with?

ADAM LASHINSKY:  But you’re not going to comment on the rumor I’m trying to start that Microsoft is buying LinkedIn?

ADAM LASHINSKY:  Fair enough.

JEFF WEINER:  Your pet project.

ADAM LASHINSKY: LinkedIn has amazing data, and you’ve been talking for a number of years now about the powerful uses that you could find for LinkedIn’s data for customers.  Could you talk about both where that stands and what’s possible?

Data really powers everything that we do.  So, it powers algorithms that will suggest people you may know, so you can build out your network.  It can suggest groups you may like that you can join and share information and knowledge.

Data powers LinkedIn today, and the relevancy of LinkedIn today headlines that we’re digesting for you on a daily basis so you have the news you need to be successful at the job you’re already in.

It powers the algorithms behind suggestions for recruiters so they can find the ideal candidate, and for job seekers to find jobs that they may be interested in.

JEFF WEINER:  Absolutely.  It powers a good portion of the products and services that you see day-in and day-out on LinkedIn.

But part of our vision is building off of this professional graph to create an economic graph.  So, imagine a world where every job and economic opportunity is digitally represented, and the skills required to get those jobs is digitally represented, and the companies offering these jobs have a profile that’s available on the web, and you can see who you know at these companies up to 3 degrees, and that every individual, every professional worldwide — you know, there’s 3.3 billion people in the global workforce — that every professional, someone that earns a living from their skill, on a global basis has their digital profile and identity available.

ADAM LASHINSKY: Do you anticipate changing the revenue or the business model for delivering some of that data or in other words would you at some point sell me access to better data or do you anticipate just delivering all of this data the way you’re delivering it now?

JEFF WEINER:  Well, the vast majority of that is already delivered for free.

ADAM LASHINSKY: For free.

But that data already does have business models associated with it.  So, with regard to recruiting and these Hiring Solutions it’s essentially data as a service, your ability to do searches from the entire platform and the entire repository.  Marketing Solutions, a very large portion of our ad sales products derive their success from targeting, the ability to target individual professionals based on their seniority, their functional area, the size of their companies, years of experience.  And even premium subscriptions for us we’re able to leverage data so we can get the right offer in front of the right member at the right price point at the right time.

ADAM LASHINSKY: But let’s take — let me be a little more specific.  Let me make up an example.  Let’s say I wanted to run a screen of companies in the LinkedIn database, only screening out small companies, so bigger than a certain kind of company, that have had a high percentage of job departures relative to total employment at those companies in the last three months.  That might flag for me problems at those companies.  Can I get at that data today?

JEFF WEINER:  As an enterprising journalist you can get at that data today, and oftentimes we will see folks searching company profiles and searching on LinkedIn in creative ways to identify those kinds of insights.

JEFF WEINER:  Yeah.  I don’t know that there would be any immediate term plans to invest in a team that would be doing the research on behalf of customers.  I think the goal would be to build out the platform in such a way where we make it really easy and intuitive for the people that want to do those kinds of searches to be able to do those kinds of searches.

JEFF WEINER:  Yeah, it’s still very early days for us.  A big part of our product focus and our roadmap in 2012 is on this notion of simplifying the site.  And what we found last year, we went from a 1.0 version of our mobile application to a 2.0 version early in the fall of last year, and it was met with very positive reviews.  We got a lot of positive feedback.  But more importantly it materially accelerated the rate of mobile adoption of LinkedIn’s products and services.  We went from 8 percent of visits to LinkedIn last March coming from mobile to 22 percent this year.

ADAM LASHINSKY: You’re saying your behavior in mobile is going to drive behavior on the web?

JEFF WEINER:  The more intuitive we can make any of these products and services, and we saw that illustrated very clearly with regard to our mobile applications.  And so this year you’re going to see us simplify a number of our pillar products on the web.  So, areas like the homepage, search results, the profile experience would be examples of that.

ADAM LASHINSKY: Well, tell me what do you want to get across on leadership and management?

ADAM LASHINSKY: And the communication is internal or external that you’re talking about there?

JEFF WEINER:  Well, it’s both, but with regard to focus it’s largely about internal communication.  As organizations get larger, it’s absolutely essential that people are being proactive in determining who needs to know what and when, and being as precise as possible.

ADAM LASHINSKY: So, give me a specific example of focus.  I assume you’re talking about in product decisions, right, because I think of LinkedIn as a user, and you know I’m a power user, as being relatively complex.  LinkedIn does a lot of things.

And I think it’s really important for any company, particularly hyper-growth companies, to be able to define the bull’s eye of that target.  That’s your core, that’s where your first dollar of investment goes, that’s where your first managerial cycle goes.  And all too often as companies start to experience success they have a lot of opportunities, and you can get distracted from that core, it’s very easy.

JEFF WEINER:  LinkedIn Research Network was an opportunity that a number of different companies and customers were coming to us and saying is there a way we can purchase certain insights and certain kinds of data.  There were partners that were very interested in working with us.  And at one point we were principled within that area, and we recognized that at least from a business model perspective the core, that bull’s eye with Hiring Solutions, that was the clearest manifestation of connecting talent with opportunity at massive scale.

On the product side the target, the bull’s eye of our target is professional identity.  It’s who you are, the representation of your experiences, your skills, your ambitions as a professional.  And from that we’re able to build search results in a way that you can’t find anywhere else and enable professionals to connect, find, and be found in these really profoundly valuable ways.  And then from there, that’s the bull’s eye, from that we go to the next adjacency which is insights.  The more we know about you as an individual professional and your network, the more we can bring to bear highly relevant insights, information, knowledge that enables our members to make better decisions faster.

ADAM LASHINSKY: That would seem to play well with research.  Insights and research would be very similar.

JEFF WEINER:  Well, you can start to connect dots all  over the place here, but it’s really important you start with that bull’s eye and you don’t move out from that bull’s eye until you get it right, until you reach critical mass.

ADAM LASHINSKY: And how do you — do you analyze that statistically, whether or not you’re continuing to pay attention to the core or is it more, I don’t know, instinctual or subjective?

JEFF WEINER:  I think there’s gut.  There’s also a lot of data that goes into that.  I mean, you can measure your performance against specific objectives, how are you performing against those objectives.  We know how many people we need to reach critical mass in terms of getting these objectives completed.

And then beyond critical mass you want to create as much buffer as you possibly can so people have breathing room, so they can be thinking about what comes next.  They’re not only reacting, they’re being proactive and they can start to dream and get creative and try different things.

JEFF WEINER:  So, I think there’s a few reasons there.  I think more often than not you speak to the challenges inherent in that transition.  And with regard to Reid and I, I didn’t join LinkedIn in spite of the fact Reid was the founder, I joined LinkedIn in large part because Reid was the founder.  I wanted the opportunity to be able to work with him more closely.  He’s an incredibly impressive guy, and he was a big part of why I was so excited to join.  So, I think that’s part of the dynamic.

I think another thing, Adam, that was really important was the way in which the prior CEO to myself, a guy named Dan Nye, handled himself, and he couldn’t have been more gracious in the way that transition was conducted.  And I think that also again puts a really strong foundation in place that you can build off of going forward.

JEFF WEINER:  Yeah, Reid — as you know, Reid is a busy guy and he’s a partner at Greylock and —

ADAM LASHINSKY: A venture capital firm.

JEFF WEINER:  A venture capital firm.  He’s extremely active in the nonprofit world.  He’s a highly sought after figure in terms of mentorship and advice, not just in startups, you know, larger companies, people, heads of state, believe it or not.

ADAM LASHINSKY: Good for you.

JEFF WEINER:  Thank you.