Blogs, Media Weigh In on LinkedIn’s $13M

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In December, LinkedIn announced that they were in the process of closing a $13M funding round. On Monday they announced that the funding deal has closed (On a side note – that’s a neat trick, getting two rounds of buzz about the same event). Anyway, this prompted another round of pontificating pundits debating whether LinkedIn is really worth its alleged $250M valuation.

Red Herring – One of the biggest questions that has surrounded this funding is, “Just what does LinkedIn need the money for?” This article has a few answers – expansion into Europe, new feature development, etc. But the real answer is right here:

Indeed, Mr. Rabois (Keith Rabois, VP of Business and Corporate Development at LinkedIn) said the funding round was more about networking with well-connected VCs than garnering more cash for well-capitalized LinkedIn.

VentureBeat – Along with the question “What for?”, the other question begged is “Why now?” VentureBeat has the answer:

The company raised the capital because it could do so on favorable terms (at higher values, a company gives away less of the company’s shares in exchange for an investment).

TechCrunch – The post itself is pretty matter-of-fact, but being TechCrunch, of course, it garnered an extensive debate in the comments worth reading. Here are a couple of my favorite excerpts:


When used as an active resource, Linked in is great. People who signup and do nothing will receive little value from the service. I have been a member of for a long time, and Linked is just blowing past it.

eoecho | Greg Magnus

Everyone I have contacted through LinkedIn has responded in a professional manner; limited bs to deal with as a member.

Unlike Mybloglog, which grows your number of connections far too easily resulting in a directory of users more than anything else (limited social value), the majority of LinkedIn members have “real” contacts listed (people they know, and a much higher social networking value).

LinkedIn is also good for “Capture Managers” and other business development pros conducting research on competitors. It is easy to connect with former employees of almost any company. Glad to hear they are getting additional funding.


Here is how my view of LinkedIn has changed dramatically in the past year:

– When I was first invited to LinkedIn about a year ago by a somewhat distant friend of a friend, I dismissed it as I didn’t know much about it, and figured it was some other facebook/myspace/friendster type site. I am in my mid 30s and hadn’t had more than a sample page with 1-2 friends on those sites.

– As it grew in popularity, I eventually joined on and grew my network. It seemed like an OK site, but still seemed as more of a competition to see who had the most work friends.

– All that changed when I got laid off in October. Suddenly it became a BUSINESS TOOL for networking, and I found it extremely valuable. Not only did I get an interview by using a contact from an old college buddy within my network that I hadn’t talked to in 10 years, but I was able to research the background of the people I would be interviewing with — and subsequently a fantastic job within 60 days.

Not sure how it will all play out, but I am certainly keeping up and expanding my network. I think it has a good chance.

Amit Chowdry – Amit was one of the commenters on the TechCrunch post above, raising the issue of Facebook and other viable competitors to LinkedIn.

After doing a little bit more thinking, I began to realize that LinkedIn is a good way to stay in contact with professionals that you may simply communicate with through various blogs or different social events. Facebook is tailored more towards a younger crowd. I have pictures on Facebook where I am standing around a keg at a party and obviously I don’t want professionals to see the lifestyle that I have on Facebook, but I would like them to possibly see my LinkedIn profile. Nothing wrong with a friendly debate though.

Ryan Mapes – The GoBIGNetwork General Manager weighs on in all the hefty valuations of social networking sites in the recent funding deals, including LinkedIn:

How can you possibly have a network of over 9 million members (predominately business executives), raise $26 million in 3 rounds of VC funding, and still only bring in $10 Million for the year? It just doesn’t make sense to me! It seems like you could bring in $10 Million worth of advertising alone considering the type of highly sought after user base that LinkedIn commands.

Cem Sertoglu – The social networking pioneer (he co-founded Select Minds) thinks $250M is an impressive valuation. When pressed by a commenter, he clarified:

I won’t say it’s an under-valued deal, but for the record, my call is that the VCs in this round will generate positive returns. In professional networking, the switching costs are high. With the lack of progressive moves in the general jobs/careers area, given the enormous size of the market there (look at Monster’s market cap at $6.2b), LinkedIn will attain a nice segment of that market. I am a buy!

So what do you think? Is LinkedIn worth $250M? What do you think they should do with the money raised?

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1 Comment

  1. Scott,
    Although I was surprised to see my quote on another blog, I’m glad you used it. It is how I found your blog.

    LinkedIn is what you make of it like anything else – works if you use it for the right reasons.

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