LinkedIn Barely Profitable

    March 7, 2012

LinkedIn, the social network for business professionals, doubled its revenue in 2011 with $522 million, though likewise became less profitable, according to Business Insider. This is due to the company nearly tripling its costs in regards to sales and marketing.

Below is a chart form LinkedIn’s annual report:


LinkedIn’s net income last year was $26 million. This number would’ve been far higher if it hadn’t hired 531 sales and marketing people in 2011, a roughly 270% increase. Likewise, the sales and marketing budget rose to $165 million in 2011, up from $59 million in 2010. Though, this was all part of a plan, as LinkedIn has stated that it was more focused on brand awareness and upping its user base than profitability.

LinkedIn’s comment on the matter – “We plan to continue to invest heavily in sales and marketing to expand our global footprint, grow our current customer accounts and continue building brand awareness. In the near term and consistent with our investment philosophy for 2011, we expect sales and marketing expenses to increase on an absolute basis and as a percentage of revenue and to be our largest expense on an absolute basis and as a percentage of revenue.”

LinkedIn presently has 150 million users, from over 200 hundred countries. Sixty percent of its user base is located outside the U.S., and as of Dec. 31st, 2011, the company had 2,116 full-time employees.