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LinkedIn bragged in its Q3 2012 earnings disclosures that the potential for growth in its user base came from all over the planet, not just the U.S.: “[we] currently have more than 187 million members in over 200 countries and territories.”That sounds like LinkedIn is the careers-based version of Facebook — something that everyone seems to use, everywhere.
In fact that’s not the case. LinkedIn is virtually locked out, or running a poor second, to similar careers networks in Germany, France and Japan, for instance.
LinkedIn remains largely hidebound to America right now, at least in terms of its revenue. CEO Jeff Weiner’s biggest problem is figuring out how to persuade foreigners to put their resumes on the site, and to make those users revenue-generators.
Here’s a deep dive, based on LinkedIn’s own metrics and BI’s research, on LinkedIn’s “foreigner” problem.
Here's LinkedIn's revenue, broken out by geographic area. All the regions are growing, but non-American areas remain the minority of the business. LinkedIn promised to expand its international membership in its 10-Q.
Here's the same information for Q3 2012 presented in a more visually intuitive way. Clearly, from a revenue point of view, LinkedIn is basically an American company. But why?
Here's what's going on in Germany: The local careers network there has more than twice the members than LinkedIn does.
Japan personal branding consultant Peter Sterlacci says:
'In a recent presentation I gave to business management majors at a university in Japan, I surveyed the room about their social media usage. Almost all students use Mixi, Japan's original social network, while 75% are on Twitter, about 50% on Facebook, maybe 15% on Google+, and absolutely 0% on LinkedIn. Out of a room of over 50 business majors, not even one person had a profile on the most powerful professional network in the world.'
In France, a network called Viadeo has more of the upper management and business-owner professionals than LinkedIn does, according to ComScore.
LinkedIn's 10-Q warns:
Operating internationally subjects us to new risks and may increase risks that we currently face, including risks associated with ... increased competition from local websites and services, that provide online professional networking solutions, such as Germany-based Xing and France-based Viadeo, and online recruitment services, such as Australia-based Seek and Japan-based Recruit, who have and may continue to expand their geographic footprint ...
The company said:
... international revenue represented 36% of total revenue in the three and nine months ended September 30, 2012, compared to 33% and 32% of total revenue in the same periods last year.
... We expect international revenue to increase on an absolute basis and as a percentage of revenue in 2012 as we continue to focus on making our platform available in more languages and further developing our brand across various international geographies.
This source says that a majority of LinkedIn's members are outside the U.S., even though the company only generates a minority of its revenue from them.
The reason: LinkedIn wants to provide the best service possible in foreign countries, and doesn't want to ruin the user experience by over-monetizing it at an early stage.
'This is being done by design,' the source says.
'If our revenue from our international operations, and particularly from our operations in the countries and regions on which we have focused our spending, do not exceed the expense of establishing and maintaining these operations, our business and operating results will suffer. In addition, as our member base expands internationally, members in certain geographies may have lower levels of engagement with our website and services.'
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