Teaching Note | HBS Case Collection | February 2008 (Revised January 2013)

LinkedIn (TN) (A) and (B)

by Mikolaj Jan Piskorski

Abstract

In the summer of 2005, LinkedIn, a two-year-old start-up, was choosing between two options to monetize its 5 million business people network. Members could contact each other through trusted intermediaries on the network to offer or seek jobs, consulting engagements, expertise, and financing. The company had outpaced its competitors by building the most populous online business network, but it had little revenue to show its investors. The first revenue option entailed keeping the existing features unchanged and rolling out a bundle of eight new services for a monthly fee of $15. These services would be targeted at network members who had forged many connections, logged in frequently, and viewed the profiles of many other members. The second proposal involved changing a basic design feature of LinkedIn by allowing members to contact each other without intermediaries for a fee. Fewer members would avail themselves of this feature, but those who did would be willing to pay as much as $5-$15 per message. This option ran a substantial risk of alienating members and would prompt some to abandon LinkedIn.

Keywords: Business Startups; Social and Collaborative Networks; Web Sites; Financing and Loans; Revenue; Design; Service Operations;

Citation:

Piskorski, Mikolaj Jan. "LinkedIn (TN) (A) and (B)." Harvard Business School Teaching Note 708-406, February 2008. (Revised January 2013.)