10-K 1 a20151231-10xkdocument.htm FORM 10-K 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
  
FORM 10-K
 
 
 
(Mark One)
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 2015
or
¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from         to             
Commission File Number: 001-35168
 
 
 
LinkedIn Corporation
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
47-0912023
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)

2029 Stierlin Court
Mountain View, CA 94043
(Address of principal executive offices) (Zip Code)
(650) 687-3600
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Name of Each Exchange on Which Registered
Class A Common Stock, par value $0.0001 per share
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
 
 
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x No  ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
 
Accelerated filer
¨

Non-accelerated filer
¨

(Do not check if a smaller reporting company)
Smaller reporting company
¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x
As of June 30, 2015 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of Class A and Class B common stock held by non-affiliates of the registrant was $23,695,488,242.
As of January 31, 2016, there were 116,508,021 shares of the registrant’s Class A common stock outstanding and 15,566,688 shares of the registrant’s Class B common stock outstanding.
 
 
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement for its 2016 Annual Meeting of stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K where indicated. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2015.


LINKEDIN CORPORATION
FORM 10-K
TABLE OF CONTENTS
 
 
 
 
Page
 
 
PART I
 
 
 
 
 
Item 1.
 
Item 1A.
 
Item 1B.
 
Item 2.
 
Item 3.
 
Item 4.
 
 
 
 
 
 
 
PART II
 
 
 
 
 
Item 5.
 
Item 6.
 
Item 7.
 
Item 7A.
 
Item 8.
 
Item 9.
 
Item 9A.
 
Item 9B.
 
 
 
 
 
 
 
PART III
 
 
 
 
 
Item 10.
 
Item 11.
 
Item 12.
 
Item 13.
 
Item 14.
 
 
 
 
 
 
 
PART IV
 
 
 
 
 
Item 15.
 




Special Note Regarding Forward Looking Statements
This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, particularly in Part I, Item 1: “Business,” Part I, Item 1A: “Risk Factors” and Part 2, Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “should,” “estimate,” or “continue,” and similar expressions or variations. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to:
•
our ability to increase our member base and create long-term value for all of our stakeholders;
•
our ability to timely and effectively scale and adapt our existing technology and network infrastructure;
•
our ability to increase engagement of our solutions by our members, enterprises and professional organizations;
•
our ability to develop effective solutions for mobile devices;
•
our ability to protect our users’ information and adequately address privacy concerns;
•
our ability to maintain an adequate rate of revenue growth;
•
the effects of increased competition in our market;
•
our ability to retain our existing subscribers and our Talent Solutions and Marketing Solutions customers;
•
our ability to effectively manage our growth;
•
our ability to successfully enter new markets, expand our product offerings and manage our international presence and expansion;
•
our ability to maintain, protect and enhance our brand and intellectual property;
•
costs associated with defending intellectual property infringement and other claims;
•
our investment philosophy for 2016;
•
our expectations for our financial performance in 2016, including our revenues, cost of revenues, expenses and expected tax benefits; and
•
the attraction and retention of qualified employees and key personnel.
For a discussion of some of the factors that could cause actual results to differ materially from our forward-looking statements, see the discussion on risk factors that appears in Part I, Item 1A: “Risk Factors” of this Annual Report on Form 10-K and other risks and uncertainties detailed in this and our other reports and filings with the Securities and Exchange Commission, or SEC. The forward-looking statements in this Annual Report on Form 10-K represent our views as of the date of this Annual Report on Form 10-K. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Annual Report on Form 10-K.


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PART I
 
Item 1.
Business
Overview
We are the world’s largest professional network on the Internet with over 400 million members in over 200 countries and territories as of the date of this Annual Report on Form 10-K. We believe we are the most extensive, accurate and accessible network focused on professionals. LinkedIn's value proposition for our members and customers is simple: connect to opportunity. Members use our platform to stay connected and informed, advance their career and work smarter.
We provide many of our products at no cost to members with the belief that our freemium business model drives the most value for our members. In return, member growth and engagement strengthens the network effect that can benefit each individual LinkedIn member.
The critical mass of our network also enables us to create value for our customers through three distinct product lines: Talent Solutions, which includes Hiring and Learning & Development, Marketing Solutions, and Premium Subscriptions. Our products are sold through two channels, an offline field sales organization that engages both large and small enterprise customers; and an online channel where enterprise customers, small business, and individual members purchase products on a self-serve basis. We seek to create reciprocal value with our products between members and customers. We believe this builds mutually aligned incentives and marketplace dynamics supporting our long-term financial objectives of sustainable revenue and earnings growth.
We were incorporated in Delaware in March 2003 under the name LinkedIn, Ltd. and changed our name to LinkedIn Corporation in January 2005. Our principal executive offices are located at 2029 Stierlin Court, Mountain View, CA 94043, and our telephone number is (650) 687-3600. Our website address is www.linkedin.com. We completed our initial public offering in May 2011 and our Class A common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “LNKD”. Unless the context requires otherwise, the words “LinkedIn,” “we,” “Company,” “us” and “our” refer to LinkedIn Corporation and our subsidiaries.
Our Mission
Our mission is to connect the world’s professionals to make them more productive and successful. We believe that prioritizing the needs of our members is the most effective and, ultimately, the most profitable means to accomplish our mission and create long-term value for all stakeholders.
Our Vision
Our vision is to create economic opportunity for every member of the global workforce. We believe our network's ultimate potential is to develop the world’s first economic graph, a digital representation of the global economy. Manifesting this vision requires scaling across six key pillars: individuals in the workforce, companies, job opportunities, professional skills, higher education institutions, and professional knowledge. By operationalizing this vision, we believe LinkedIn can enable members to connect to opportunity at global scale.
Our Strategy and Value Propositions
Our strategy is focused on three key value propositions for both members and customers. These value propositions allow us to fully embrace our hybrid model as an enterprise services business built on a consumer web platform and continue to build on critical platform capabilities necessary for professionals:
•
Stay connected & informed: Our flagship LinkedIn application and our professional publishing platform focus on helping members keep up with their connections, stay up to date with relevant news and ideas, and share views and knowledge. We believe delivering members a relevant and highly engaging feed experience is critical in creating value.
•
Advance my career: Helping members both get hired and learn new skills has emerged as an essential element of our platform. We accelerated this focus through our 2014 acquisition of Bright Media Corporation, taking the number of jobs available on LinkedIn to nearly 5 million from approximately 300,000 two years ago. In addition, our 2015 acquisition of lynda.com, Inc. ("Lynda.com"), Inc. launched our entrance into the learning and development market by introducing skills-based learning to our platform.

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•
Work smarter: Work smarter captures the value we create for members and customers through our monetized products. For recruiters, LinkedIn provides a destination to attract, recruit, and hire talent. For marketers, LinkedIn provides a platform to market products and services, especially with a business-to-business focus. For sales professionals, LinkedIn provides a social selling tool to help find leads and generate sales. For individuals, LinkedIn offers premium subscription packages that are designed for general professionals to manage their professional identity, grow their networks, and connect with talent. Finally, we recently began to focus on helping individuals and small businesses find freelance professionals.
LinkedIn’s platform capabilities support these value propositions by enabling a member to: establish and manage their reputation through their LinkedIn profile, build their professional network, and research and contact any professional on LinkedIn. Lastly, we are committed to making our network accessible on a global basis through mobile-first product offerings.
Our Solutions
Our solutions are designed to make professionals more productive and successful and to connect talent with opportunity at massive scale. Our focus is on developing products that enable our members and customers to stay connected and informed, advance their careers, and work smarter.
Our principal free and monetized solutions are described below:
Free Solutions
Stay Connected & Informed
 
Advance My Career
LinkedIn Flagship: 
Feed, Me, Messaging,
My Network & Search
People You May Know
Pulse
Influencers
Groups
Slideshare
LinkedIn Lookup
Address Book Importer
Publishing Platform


 
Jobs
Job Search App
Company Pages
University Pages
Who's Viewed Your Profile / How You Rank
Rich Media / Skills / Endorsements



Ubiquitous Access
LinkedIn Mobile
Robust set of APIs

Monetized Solutions
Work Smarter
Talent Solutions
 
Marketing Solutions
 
Premium Subscriptions
Hiring
LinkedIn Corporate Solutions (Recruiter, Referrals, Job
Slots, Recruitment Media,
Career Pages)
LinkedIn Job Postings
Job Seeker
Recruiter Lite
Learning & Development
Lynda.com
 
Sponsored Updates
LinkedIn Ads
Elevate
Sponsored InMails
Display Ads
Ads API

 
Professional/Individual
Subscriptions
Sales Solutions (Sales Navigator)
Profinder



Free Solutions
Many of our member solutions are available at no cost and are designed to provide compelling professional benefits.

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Stay Connected & Informed
LinkedIn Flagship. You will find the following five tabs at the bottom of the LinkedIn Flagship Mobile application. Our desktop application will soon follow this five-pillar construct as well.
•
Feed (Home). We provide a real-time stream of data from professionals and professional sources, personalized for each member. The stream allows each member to control and select data by relevancy, and members can remain up-to-date on what is happening in their professional world. Members can “like”, comment and post new updates to the stream.
•
Me (Profile). Our core offering provides every member with an online professional profile. A member’s profile is accessible to all members on our network and includes user-generated information including current job title and employer, education, career history, domain expertise, accomplishments, skills and additional professional information such as honors, awards, association memberships, patents, publications, certifications and languages spoken. Members populate their own profile information, enabling them to ensure their professional identity is accurate, current and under their control. In addition, Add-to-Profile Certifications allows members to update their profiles with certifications from courses completed through partner sites.
•
Messaging. Our messaging tab provides a chat-style interface to allow for easy back and forth messaging. Messages are organized for easy reference to the last conversation within a thread. Members also receive push and email notifications to make it easier to find conversations.
•
My Network. The My Network tab presents a brief update of a member's network for the day, such as work anniversaries, job changes, and recently published articles from a member's network. In addition, links to Invitations and Connections are included at the top left portion of the navigation pane.
•
Invitations. Members can expand their networks by sending invitations. Any non-member accepting an invitation simultaneously becomes a LinkedIn member, connected to the sender, after completing the registration process.
•
Connections. Once two members are connected, their profile information is shared and, subject to privacy settings, each member has access to the other member’s list of connections for further networking. Connections across the network are classified to three degrees: first degree connections are members who agree to connect, second degree connections are members who share one or more mutual connections, and third degree connections are related via two connections. Members can retrieve the contact information of their first degree connections and browse their second and third degree connections in order to find additional opportunities to network and connect.
•
Search. Our proprietary search technology allows users to conduct real-time, multilingual searches of our rich dataset in a completely personalized manner, as a member’s profile and network affect relevance and ranking of results. Our search capabilities include:
•
People. Faceted, structured search across all member profiles.
•
Job Postings. Faceted, structured search across all of the available jobs listed on our network, as well as off-network jobs.
•
Companies. Faceted, structured search of enterprises and professional organizations.
•
Groups. Search all professional groups on our network.
•
Inbox Messages. Search inbox messages.
•
Address Book. Detailed, structured search across all of the connections a member has on LinkedIn.
•
Publishing Content. Search Influencer and member posts on LinkedIn by topic or Influencer name.
•
Universities. Search all universities on our network.
People You May Know. This product recommends members whom you may already know and with whom you may want to create a first degree connection.
Pulse. Pulse enables our members to be better informed in their everyday jobs by showing them relevant news that has been collected and organized by the members in their networks and fellow professionals in their industries.
Influencers. LinkedIn Influencers provides a publishing platform for thought leaders to post unique knowledge and professional insights on LinkedIn. Members can follow these individuals to receive relevant content directly in their

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Network Updates and email. Members can "like" and comment directly on posts and share these insights with their networks.
Groups. Groups provide a forum for our members to discuss topics of interest and meet and interact with other professionals who share those interests and have opinions and domain expertise in specific areas. Group members are able to discuss, share, comment and make their group memberships part of their profiles.
Slideshare. Slideshare provides our members with access to what we believe is the world’s largest community for sharing presentations on the Internet. Slideshare supports a wide variety of rich media including presentation files, documents, PDFs, videos and webinars.
LinkedIn Lookup. This application allows members to quickly contact anyone at their company, even if they are not connected to them on LinkedIn. Members can find coworkers by title, skill, name, and expertise. Only coworkers using LinkedIn Lookup can view the profile data a member enters into this application.
Address Book Importer. Our address book importer allows members to quickly and easily import contact information from their existing digital address books to LinkedIn.
Publishing Platform. The majority of our members have the ability to publish long-form content on our platform. When a member publishes a post on LinkedIn, their original content becomes part of their professional profile, is shared with their trusted network and has the ability to reach a large group of professionals assembled online. Additionally, members have the ability to follow other members that are not in their networks and build their own group of followers.
Advance My Career
Jobs. Members actively seeking job opportunities can find millions of open jobs posted on LinkedIn. Jobs include suggestions for relevant positions through paid posts as well as open roles from companies’ career sites, applicant tracking systems and third-party sites.
Job Search App. LinkedIn Job Search Application provides tools for finding a job. Members can find opportunities with location-based search, get automatic recommendations and notifications based on their job searches, and can apply to jobs using their LinkedIn profile.
Company Pages. Company Pages provide members with a holistic view of a company. By aggregating data across the members employed at a particular company, we can show which members have recently joined a company, recently changed their title at a company or recently left a company. Members can also see who they know at a particular company. Companies can add information to their profiles and can highlight information about careers via the Careers Page. Members can follow companies and automatically receive recent updates and recommend products and services.
University Pages. University Pages provide students, prospective students, and alumni access to insights and information on thousands of universities globally. Members can receive updates on campus news and activities from the schools themselves and engage with both the campus community and alumni of schools. Additional tools such as University Rankings, which use alumni career outcomes to rank schools for specific careers, and University Finder, which show the most attended schools for a given career, offer new ways for students to navigate one of life’s biggest decisions: choosing where to go to school and what to study.
Who’s Viewed Your Profile / How You Rank. The Who’s Viewed Your Profile module provides real-time analytics to help members better manage their professional profile including information on who has viewed their profile, top search keywords used to reach their profile, and other details and trends on the demographics of the audience that has viewed their profile. Additional features of this product are available for members with Premium Subscriptions. With the "How You Rank" tool, members can see how they compare to others in their network with profile views and receive personalized recommendations on how to increase their visibility.
Rich Media/Skills/Endorsements. Members can provide examples of their work and skills by sharing rich media content in their profiles. Additionally, members are able to both specify skills on their professional profiles and search for skills and expertise across our network, which surfaces key people within a community, top locations, related companies, relevant jobs, and groups where members can interact with like-minded professionals. In addition, Endorsements enables members to endorse their first degree connections for skills with one click.
We also provide other products to help our members access knowledge, insights and opportunities including a number of analytically driven customized products, such as Jobs You May Be Interested In, Groups You May Like, Companies To Follow, People Who Viewed This Profile Also Viewed, and People Who Viewed This Job Also Viewed.

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Ubiquitous Access
Because professionals constantly require access to critical information, our platform is accessible online anytime and anywhere, including on mobile devices.
LinkedIn Mobile. LinkedIn mobile applications are provided across a range of platforms and languages, including iOS for iPhone and iPad, Android, Blackberry, Nokia Asha, and Windows Mobile. Members can access LinkedIn content via LinkedIn’s flagship app, which showcases the essentials of the LinkedIn platform on mobile.
Robust set of APIs. We believe that LinkedIn can make many modern third party applications more useful and effective for our members. We maintain a public website that allows any developer to agree to a standard set of terms and then integrate a subset of our content and services into their applications leveraging standards-based technology. These applications can be hosted on third-party websites or deployed on our platform. We also make our APIs available to support a range of Partner Programs in which a network of vetted developers can leverage LinkedIn APIs to support specific use cases that span our consumer, Talent Solutions, Marketing Solutions and Sales Solutions offerings. Third parties are increasingly leveraging our APIs.
Monetized Solutions/Work Smarter
In addition to our free solutions, we also charge for certain solutions that provide members, enterprises and professional organizations with enhanced functionality and additional benefits. These include Talent Solutions, which includes Hiring and Learning & Development, Marketing Solutions, and Premium Subscriptions.
Talent Solutions
Our Talent Solutions include Hiring and Learning & Development products. Hiring provides innovative recruiting tools to help our customers become more successful at talent acquisition and professional development. Our products aim to be the most effective way for enterprises and professional organizations to efficiently identify and acquire the right talent for their needs. Learning & Development provides online education courses that aim to make it easy for professionals to accelerate their careers and realize their potential by learning new skills.
Hiring
•
LinkedIn Recruiter. Our flagship Talent Solutions product enables enterprises and professional organizations to find, contact and hire highly qualified passive and active candidates. We believe that a majority of our members are passive in that they are not actively looking to change jobs. Recruiter provides premium functionality including:
•
Advanced Searches. Ability to search and view every profile on our network, giving most recruiters access to tens of millions more profiles than they would have available with our free offering. Advanced searches can be conducted using keywords found anywhere in a member's profile, such as schools attended and languages spoken, or by data derived from profiles, such as type of experience and seniority.
•
Project Management. As enterprises and professional organizations find relevant profiles, they are able to organize them into project folders, add notes, and add reminders for follow-up.
•
InMail. Enterprises and professional organizations can send messages directly to candidates to tell them more about their organization or a specific opportunity, subject to the member's discretion.
•
Collaboration. Recruiters in the same enterprise or professional organization can see which profiles their colleagues have viewed, saved, or annotated.
•
LinkedIn Talent Pipeline. Our talent pipeline allows enterprises and professional organizations to easily manage all of their talent leads in one place. LinkedIn Talent Pipeline is available as a standalone solution or as part of Recruiter.
•
Referrals. LinkedIn Referrals is in an initial launch phase and available to select companies on supported Applicant Tracking Systems. Our goal is to allow customers to automatically uncover quality hires by engaging their employees, who will then use their networks to recruit for the companies
•
Job Slots. A Job Slot enables an enterprise or professional organization to post a job on the LinkedIn platform typically for one year. The job that is posted can be changed, updated or modified at any time over the life of the contract.

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•
Recruitment Media. Enterprises and professional organizations can target career-related messaging to qualified candidates. We provide promotional material in the form of advertisements, videos, or emails to specific audiences defined by enterprises and professional organizations based on professional profile data.
•
Career Pages. Enterprises and professional organizations are able to customize the career section of Company Profiles and content on Career Pages to allow potential candidates to learn more about what it is like to work at the enterprise or professional organization, whom to contact if they are interested in a position and what relevant opportunities are available.
•
LinkedIn Job Postings. Enterprises and professional organizations of all sizes are able to advertise job opportunities on our network. Job Postings include:
•
Self-Service Job Posting. This service enables recruiters and hiring managers to post and manage job opportunities on our network.
•
Jobs You May Be Interested In (JYMBII). We use profile data to display relevant job postings to members even if they are not conducting a job search. Job recommendations are displayed on a member's homepage and can also be displayed on other websites. In addition, companies can highlight job recommendations in JYMBII through Sponsored Jobs.
•
Job Seeker. The Job Seeker subscription enables members to stand out to recruiters and hiring managers, get in touch with recruiters, and see how they compare to other candidates. Members can quickly find job opportunities wherever they want with location-based search, and can get automatic recommendations and notifications based on their searches.
•
Recruiter Lite. This product is similar to our flagship Recruiter product without custom workflows and team collaboration.
Learning & Development
•
Lynda.com. A Lynda.com subscription allows members to learn anytime, anywhere from experts across a wide variety of fields. Lynda.com provides a full video training library indexed by subject, software and new releases. Subscribers can sync course history across all of their devices, stream courses directly to their TV, auto-play entire courses, or watch individual videos. In addition, they can share courses across social networking apps, edit and view playlists and download or view full courses offline.
Marketing Solutions
Our Marketing Solutions products enable enterprises and individuals the ability to advertise to our member base. Our targeting capabilities allow marketers to reach potential customers according to a number of attributes such as industry, function, seniority, and company size, among others.
•
Sponsored Updates. Available via both field sales and self-service channels, Sponsored Updates are content-rich promoted updates that enable advertisers to share and amplify content marketing messages to a targeted audience. Sponsored Updates appear in the desktop and mobile streams of targeted members.
•
LinkedIn Ads. Our self-service platform enables advertisers to build and target their advertisements to our members based on information in their profile. LinkedIn Ads includes the following features:
•
Targeting. Ads are targeted to specific members based on their profile information. Targetable attributes include the member's title, function, employer, industry and geography.
•
Daily Campaign Budgets. A maximum daily budget can be set for advertisements.
•
Campaign Management. Advertisers can set up and manage multiple campaigns as well as multiple ad units per campaign.
•
Reporting. Advertisers can continuously monitor clicks, impressions, click-through rates, average cost-per-click and total budget spent by ad.
•
Sponsored InMails. Advertisers can directly reach their target audience with long-form, customized messages through LinkedIn’s InMail functionality.
•
Display Ads. Advertisers can use the same targeting engine used for LinkedIn Ads to serve ads in a variety of sizes and formats, including rich media. Additional LinkedIn-specific formats are also available, including Follow Ads. In addition, we offer off-network advertising.

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•
Ads API. LinkedIn’s Ads API program enables our social ad partners to build custom solutions for creating, managing, and optimizing LinkedIn Ads and Sponsored Updates campaigns at scale.
•
Elevate. Elevate allows enterprises to encourage their employees to share relevant content across their social networks.
Premium Subscriptions
Our Premium Subscription services target small- and medium-sized enterprises and professional organizations, individual members and business groups in larger enterprises. Certain of our Talent Solutions products (Recruiter Lite and Job Seeker) are sold online directly through our site to individuals. All of our subscription packages are designed for general professionals to manage their professional identity, grow their networks and connect with talent. These subscriptions bundles are sold at different price points. Key features found in the subscription bundles include:
•
Open Profile. This opens opportunities to subscribers by allowing anyone on LinkedIn to contact them for free.
•
Top Keyword Suggestions. Custom keyword suggestions for subscribers’ profiles appear more often in search results.
•
Larger Search Listing. This attracts more visitors to a subscriber’s profile with a search listing twice the size of a free member’s.
•
Premium Search. This provides advanced search filters and unlimited people searches within a subscriber’s network up to third degree connections.
•
Saved Search Alerts. Alerts allow subscribers to stay up to date on key activities, such as searches for candidates, leads or other decision makers.
•
Who's Viewed Your Profile. Subscribers can see who viewed their profiles in the last 90 days and how they found the subscriber.
•
How You Rank. Subscribers can see how they rank for profile views as compared to their connections, colleagues and other professionals.
•
InMail Messages. Subscribers can send direct messages to anyone on LinkedIn.
•
Sales Solutions (Sales Navigator). LinkedIn Sales Navigator is a premium social selling solution that provides sales professionals with the ability to quickly find, qualify and create new opportunities, and can help sales management accelerate the social selling capabilities of their sales organization. We market Sales Navigator through both our field sales force, as well as our self-service subscription platform for individual members. Sales Navigator includes the following features:
•
Lead Recommendations. Provides sales professional the ability to quickly discover the right people with customized suggestions based on similar decision makers and influencers at target accounts.
•
Real-Time Sales Updates. Allows for relevant and timely sales insights on accounts and leads, including job changes, shares and news mentions.
•
Account and Contact Import. Automatically imports existing accounts and contacts from Salesforce.com into Sales Navigator.
•
TeamLink. Allows sales professionals to broaden their network to include everyone on their team, increasing the number of reachable prospects and allowing them to focus on the best prospects.
•
Lead Builder & Premium Search. Create lead lists using custom criteria to find new accounts or upload named accounts, helping sales professionals find the right people faster.
•
CRM Integration. Turns contact records into rich profiles by allowing users to see LinkedIn information directly in Salesforce.com or Microsoft Dynamics.
•
Profinder. LinkedIn Profinder is a platform that connects members to top freelance professionals in their area with the help of LinkedIn’s trusted network. It's currently being piloted in the San Francisco Bay Area and New York.
Sales, Marketing and Customer Support
Sales

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We sell our Talent Solutions, Marketing Solutions, and Sales Solutions (included in Premium Subscriptions) offline through our field sales organization or online on our website. We sell our Premium Subscriptions, other than Sales Solutions, primarily online on our website. Our field sales organization uses a direct sales force to solicit customers and agencies. In the United States, our field sales organization is located in Chicago, New York and the San Francisco Bay Area. Outside of the United States, we have additional field sales offices around the world.
For our Talent Solutions, we divide our field sales organization between account executives who are responsible for new business and relationship managers who focus on renewing and selling additional seats and solutions to existing customers. Some of our Talent Solutions products, such as Recruiter Lite, Job Postings and Job Seeker, are sold through our website.
For our Marketing Solutions, our field sales organization focuses on advertising agencies, large brand advertisers and performance advertisers that want to target professionals on our website. We also sell our Marketing Solutions to online advertisers that use our online self-service system to establish accounts, create ads, target members, and launch and manage their advertising campaigns.
For our Sales Solutions, we divide our field sales organization between account executives who are responsible for attracting new business and relationship managers who focus on renewing and selling additional seats and solutions to existing customers. Our Sales Solutions products are also available for purchase online.
Marketing
To date, our member base has grown, in large part, virally based on members inviting other members to join our network. Through this word-of-mouth marketing, we have been able to build our brand with relatively low marketing costs. We use the quality of our own products and solutions as our most effective marketing tool, and word-of-mouth momentum continues to drive member awareness and trust worldwide.
Customer Support
We believe that customer support is critical to retaining and expanding both our member base and customers. Our global customer operations group responds to both business and technical inquiries from individual members, enterprises and professional organizations relating to their accounts and how to use our features and products. Self-service support is available through our website and customers can also contact us via email. We have specific premium support teams dedicated to premium subscribers, online advertisers, and our Talent and Sales Solutions customers.
Customers
Our customers include individuals, enterprises, and professional organizations. No individual customer represented more than 10% of our net revenue in 2015, 2014 or 2013.
Technology Infrastructure
Our technology platform is designed to create an engaging professional networking experience for our members and is built to enable future growth at scale. We employ technological innovations to increase efficiency and scale our business.
Our products rely upon and leverage the massive amounts of data in our network. This rich dataset has grown exponentially, requiring scalable computing resources. We will continue to invest in building proprietary technologies and using open sourced technologies for our data, search and solutions. Our product development expense was $775.7 million, $536.2 million and $395.6 million in 2015, 2014 and 2013, respectively.
Our key technology platforms are described below:
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Professional Graph. Our fully distributed system is comprised of a graph engine where nodes can represent individuals, companies, schools and other entities and edges can be a connection, a “follow,” or an employee at a given company. The professional graph holds an individual’s real-time network and enables a variety of complex calls like establishing the degree by which two nodes are connected (e.g., second degree vs. third degree).
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Open Sourced Technologies. We deploy aspects of our technology into the open source community to help increase the speed at which the technology can mature. The combination of open source and proprietary technologies used in our platforms allows us to quickly deploy our products at scale. For example, Hadoop is an open source project used to batch compute data for different features on our website based on our members’ data and traffic patterns. Hadoop enables us to scale our calculations on an expanding set of data and to perform these calculations more frequently.

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Search. Our proprietary search technology combines structured and free-form content to allow users to search across numerous parameters. Our search is powered by our rich dataset based on facets and keywords and is fundamentally personalized as all search requests use a member’s network to influence relevance and ranking. Our search is real time, distributed and multilingual and serves the needs of both members and enterprises and professional organizations.
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Customized Content, Matching, Targeting and Recommendations. We have developed a proprietary intelligence and recommendation engine for extracting professional insights by utilizing our rich dataset. This engine enables us to provide our users with customized content and recommendations. For example, based on a member’s profile, their second and third degree connections, their viewing and clicking history, and a host of other criteria, our algorithms can provide intelligence and recommendations around Talent Match, People You May Know, Groups You May Like, Jobs You May Be Interested In, Sponsored Content or Companies You May Be Interested In. Our targeting and recommendation technologies continue beyond just a member’s profile by providing intelligence around similar profile views and similar job views.
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Ad Targeting Platform. We use a combination of traditional and proprietary ad targeting and delivery technologies. The combination is optimized to work with our respective partners to provide the optimal user experience. Our proprietary systems leverage our feature extraction, information retrieval, and matching systems to provide the most relevant ads.
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Document Conversion Technologies. We use a combination of open source and proprietary technologies to convert documents in various formats (e.g., pdf, doc, ppt) into HTML5, a mark-up language for structuring and presenting content on the Internet, so that the document can be displayed on LinkedIn.com and Slideshare.net, and embedded throughout the Internet.
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Service Infrastructure. We have invested and are continuing to invest in updating our online applications to our new service infrastructure, which we believe will improve developer productivity, agility and operability, and accelerate our mobile strategy.
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Experimentation Platform. We have developed a testing platform that allows us to evaluate different options for rendering an experience to our members. As a test runs, this platform provides an in-depth perspective on how the test impacts our metrics. This proprietary technology allows us to better evaluate potential changes in our products.
Operations
We have developed our website and related infrastructure with the goal of maximizing the availability of our platform to our members, enterprises and professional organizations. Our website and related infrastructure are hosted on a network located in multiple third-party facilities, and we lease data center facilities in various locations.
Intellectual Property
We protect our intellectual property rights by relying on various laws and rights in the United States and other countries, as well as contractual restrictions.
We also rely on a combination of trade secrets, copyrights, trademarks, trade dress, domain names and patents to protect our intellectual property. We pursue the registration of our domain names, trademarks, and service marks in the United States and in many locations outside the United States. Our trademarks and registered trademarks in the United States and other countries include “LinkedIn” and the “in” design mark, as well as others. We register copyrights in many of our online training videos. We hold a growing portfolio of issued patents of varied duration in the United States and internationally, and regularly file patent applications to protect intellectual property that we believe is important to our business. We believe the duration of our patents is adequate relative to the expected lives of our products. We seek to protect our trade secrets through a combination of physical controls and contractual restrictions. For example, we enter into confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements with third parties.
Circumstances outside our control could pose a threat to our intellectual property rights. Effective intellectual property protection may not be available in the United States or other countries in which our products and solutions are distributed. For example, in many countries the protection of database rights can be limited. Also, the efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our business or our ability to compete. Also, protecting our intellectual property rights is costly and time-consuming. For example, we expect to spend time and resources policing the unauthorized use and streaming of our online training videos. Any unauthorized disclosure or use of our intellectual property could make it more expensive to do business and harm our operating results.

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Companies in the Internet, social media technology and other industries may own large numbers of patents, copyrights, and trademarks and may frequently request license agreements, threaten litigation, or file suit against us based on allegations of infringement or other violations of their intellectual property rights. From time to time, we face, and we expect to face in the future, allegations that we have infringed the trademarks, copyrights, patents and other intellectual property rights of third parties, including our competitors and non-practicing entities.
Competition
We face significant competition in all aspects of our business, and we expect such competition to increase, particularly in the market for online professional networks and engagement of professionals. Specifically, we compete for members, enterprises and professional organizations as discussed below.

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Members-professional networks. The space for online professional networks is rapidly evolving. Other companies such as Facebook, Google, Microsoft and Twitter are developing or could develop solutions that compete with ours. Further, some of these companies are partnering with third parties to offer products and services that could compete with ours. Additionally, we face competition from a number of companies outside the United States that provide online professional networking solutions. We also compete against smaller companies that focus on groups of professionals within a specific industry or vertical. Our competitors may announce new products, services or enhancements that better address changing industry standards or the needs of members and customers, such as mobile access or different market focus. Any such increased competition could cause pricing pressure, loss of business or decreased member activity, any of which could adversely affect our business and operating results. Internet search engines could also change their methodologies in ways that adversely affect our ability to optimize our page rankings within their search results.

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Enterprises and professional organizations-Talent Solutions. With respect to our Talent Solutions, we compete with online recruiting companies, talent management companies and larger companies that are focusing on talent management and human resource services, job boards, traditional recruiting firms and companies that provide learning and development products and services. Additionally, other companies, including newcomers to the recruiting or learning and development industries, may partner with Internet companies, including social networking companies, to provide services that compete with our solutions, either on their own or as third party applications. If the efficiency and usefulness of our products to enterprises and professional organizations do not exceed those provided by competitors, we will not be able to compete successfully.

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Enterprises and Professional Organizations-Marketing Solutions. With respect to our Marketing Solutions, we compete with online and offline outlets that generate revenue from advertisers and marketers. To the extent competitors are better able to provide customers with cost-effective access to attractive demographics, either through new business models or increased user volume, we may not be successful in retaining our existing advertisers or attracting new advertisers, and our business would be harmed.

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Enterprises and professional organizations-Premium Subscriptions/Sales Solutions. With respect to our Premium Subscriptions and Sales Solutions, we compete with online and offline companies for customers with lead generation and customer intelligence and insights. Our Sales Solutions product is in the early stages, and we may not be able to compete effectively in this area.
We believe that we have competitive strengths that position us favorably in our lines of business. However, our industry is evolving rapidly and is becoming increasingly competitive. Larger and more established companies may focus on professional networking and could directly compete with us. Smaller companies could also launch new products and services that we do not offer and that could gain market acceptance quickly.
Government Regulation
We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business online, many of which are evolving and could be interpreted in ways that could harm our business. In the United States and abroad, laws and regulations relating to the liability of providers of online services for activities of their users and other third parties are being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories based on the

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nature and content of the materials searched, the advertisements posted, or the content provided by users. Further some countries impose regulations regarding, or require licenses to conduct various aspects of our business, including employee recruiting, news related services and online advertising. Any court ruling or other governmental action that imposes liability on providers of online services for the activities of their users or other third parties could harm our business. In addition, rising concern about the use of social networking technologies for illegal conduct, such as the unauthorized dissemination of national security information, money laundering or supporting terrorist activities, may in the future produce legislation or other governmental action that could require changes to our products or services, restrict or impose additional costs upon the conduct of our business or cause users to abandon material aspects of our service.
In the area of information security and data protection, most states have enacted laws and regulations requiring notification to users when there is a security breach of personal data, or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to practically implement. The costs of compliance with these laws and regulations may increase in the future as a result of amendments or changes in interpretation. Furthermore, any failure on our part to comply with these laws and regulations may subject us to significant liabilities.
We are also subject to federal, state, and foreign laws and regulations regarding privacy and protection of member data. Our privacy policies and user agreements describe our practices concerning the use, storage, transmission and disclosure of personal information, including member, visitor and user data. Any failure by us to comply with these terms or privacy related laws and regulations could result in proceedings against us by governmental authorities or others, which could harm our business. In addition, the interpretation of privacy and data protection laws and regulations and their application to online services are unclear, evolving and in a state of flux. For example, in October 2015, the highest court in the European Union invalidated reliance on the US-EU Safe Harbor regime as one of the legally recognized mechanisms under which the personal data of European citizens could be transferred to the United States. We believe that LinkedIn’s processing of European citizens’ personal data in the United States is authorized under other legally recognized mechanisms, but the validity of these other legal mechanisms is not certain and may change in light of changes in the political, legislative and legal environment in Europe. There is a risk that these laws and regulations may be interpreted and applied in conflicting ways from state to state, country to country, or region to region, and in a manner that is not consistent with our current data protection practices, or that new laws or regulations will be enacted. There are a number of legislative proposals pending before US state and federal legislative bodies and foreign governments concerning privacy and data protection that could affect us. For example, the European Union recently released a draft regulation expected to become law in early 2018 that would result in a comprehensive update of European data protection regulations. In addition, because our services are accessible worldwide, certain foreign governments have claimed and others may claim that we are required to comply with their laws and regulations, including with respect to the storage, use and disclosure of member information, even in jurisdictions where we have no local entity, employees, or infrastructure. Complying with these varying domestic and international requirements could cause us to incur additional costs and change our business practices. Further, any failure by us to adequately protect our members’ privacy and data could result in a loss of member confidence in our services and ultimately in a loss of members and customers, which could adversely affect our business.
Our Values and Company Culture
Our values and unique company culture are the foundation to our success. Our values are the principles we use to manage our day-to-day business and facilitate decision-making. Our core values are:
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Members First. We encourage employees to know and understand our members and to ensure that we foster the long-term vitality of the LinkedIn ecosystem.
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Relationships Matter. By fostering trust with colleagues and partners, we all succeed. We fundamentally believe that doing what is right is more important than being right. We manage compassionately by recognizing that people have experiences and perspectives that may differ from our own.
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Be Open, Honest and Constructive. We expect our employees to communicate with clarity and provide feedback with consistency in a constructive way.
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Demand Excellence. Our employees are encouraged to lead by example, seek to solve big challenges, set measureable and actionable goals, and continuously learn, iterate and improve.
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Take Intelligent Risks. Taking intelligent risks has been paramount in building the company to date. No matter how large the company becomes, we strive to never lose our startup mentality.

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•
Act Like an Owner. Talent is our most important asset. We expect employees to act as an owner in each decision they make, no matter how big or small.
Our culture reflects who we are and the company we aspire to be. It is shaped by our values and defined by:
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Transformation. People who work at LinkedIn are here because they seek to make a positive and lasting impact on the world, help realize the full potential of LinkedIn and fundamentally alter the trajectory of their careers.
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Integrity. We don’t believe the ends justify the means. Rather, we expect employees to do the right thing no matter what.
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Collaboration. Much like the network effects inherent in our business model, we believe that as valuable as we are as individuals, we are all exponentially more valuable when aligned and working together.
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Humor. Fulfilling our mission and vision requires an intense focus so we believe it is important to not take ourselves too seriously and try to have some fun while doing it.
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Results. We set clear, actionable goals and have high expectations for our performance. We count on our employees to consistently deliver excellent results, seek leverage through greater efficiency and effectiveness, and demonstrate leadership at all levels throughout the organization.
We believe we have assembled a talented group of employees who are passionate about solving significant challenges in our markets. As of December 31, 2015, we had 9,372 employees, consisting of 3,922 employees in engineering, product development and customer operations, 4,147 employees in sales and marketing, and 1,303 employees in general and administrative functions.
Information about Segment and Geographic Revenue
Information about segment and geographic revenue is set forth in Note 16 of the Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K.
Seasonality
Our business is affected by both cyclicality in business activity and seasonal fluctuations in Internet usage. We believe our rapid growth has masked the cyclicality and seasonality of our business. As our revenue growth rate slows, we expect that the cyclicality and seasonality in our business may become more pronounced and may in the future cause our operating results to fluctuate. In particular, we expect new business and renewals of Talent Solutions to be stronger in the fourth quarter of the year due to budgetary cycles and our Marketing Solutions business to be stronger in the second and fourth quarter of the year in alignment with industry advertising spending.
Available Information
Our website is located at www.linkedin.com, and our investor relations website is located at http://investors.linkedin.com/. The following filings are available free of charge through our investor relations website after we file them with the SEC: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and our Proxy Statements for our annual meetings of stockholders.
We webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations website. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs as part of our investor relations website. Investors and others can receive real-time notifications of new information posted on our investor relations website by signing up for email alerts and RSS feeds. Further corporate governance information, including our certificate of incorporation, bylaws, governance guidelines, board committee charters, and code of conduct, is also available on our investor relations website under the heading “Corporate Governance.” The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. We have used, and intend to continue to use, our investor relations website, as well as our website (www.linkedin.com), the LinkedIn page (https://www.linkedin.com/company/linkedin), our Twitter feed (https://twitter.com/linkedin) and our corporate blog (www.blog.linkedin.com), as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
 

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Item 1A.
Risk Factors
Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including our consolidated financial statements and related notes, before deciding whether to purchase shares of our Class A common stock. If any of the following risks are realized, our business, operating results and prospects could be materially and adversely affected. In that event, the price of our Class A common stock could decline, and you could lose part or all of your investment.
Risks Related to Our Business
Our core value of putting our members first may conflict with the short-term interests of our business.
One of our core values is to make decisions based on the best long-term interests of our members, which we believe is essential to our success in increasing our member growth rate and engagement, creating value for our members and in serving the best, long-term interests of the company and our stockholders. Therefore, in the past, we have forgone, and may in the future forgo, certain expansion or short-term revenue opportunities that we do not believe are in the best interests of our members, even if our decision negatively impacts our operating results in the short term. In addition, our philosophy of putting our members first may cause disagreements, or negatively impact our relationships, with our existing or prospective customers. This could result in enterprises and professional organizations blocking access to our services or refusing to purchase our Talent Solutions, Marketing Solutions or Premium Subscriptions. Our decisions may not result in the long-term benefits that we expect, in which case our member engagement, business and operating results could be harmed.
We may not timely and effectively scale and adapt our existing technology and network infrastructure to ensure that our services and solutions are accessible within an acceptable load time. Additionally, natural disasters or other catastrophic occurrences beyond our control could interfere with access to our services.
A key element to our continued growth is the ability of our members, users (whom we define as anyone who visits one of our websites through a computer or application on a mobile device, regardless of whether or not they are a member), enterprises and professional organizations in all geographies to access our websites, services and solutions within acceptable load times. We call this website performance. We have experienced, and may in the future experience, service disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints due to an overwhelming number of users accessing our services simultaneously, and denial of service or fraud or security attacks. In some instances, we may not be able to identify the cause or causes of these website performance problems within an acceptable period of time. We expect it will become increasingly difficult to maintain and improve our website performance, especially during peak usage times and as our solutions become more complex and our total user traffic increases. If our services are unavailable when users attempt to access them or they do not load as quickly as users expect, users may seek other websites or services to obtain the information for which they are looking, and may not return to our website or use our services as often in the future, or at all. This would negatively impact our ability to attract members, enterprises and professional organizations and increase engagement of our members and users. We expect to continue to make significant investments to maintain and improve website performance and to enable rapid releases of new features and products. To the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed.
We have implemented a disaster recovery program, which allows us to move production traffic to a backup data center in the event of a catastrophe. For the majority of our services, we serve traffic out of multiple data centers in parallel. This allows us the ability to move traffic immediately and, in the event of a problem, the ability to recover in a short period of time. However, some of our services have not yet migrated to this model and still operate solely in a primary data center. In the event of a disaster, these services would remain shut down during the transition to a backup data center. To the extent our disaster recovery program does not effectively support the movement of traffic in a timely or complete manner in the event of a catastrophe, our business and operating results may be harmed.
Our systems are also vulnerable to damage or interruption from catastrophic occurrences such as earthquakes, floods, fires, power loss, telecommunication failures, terrorist attacks and similar events. Our US corporate offices and certain of the facilities we lease to house our computer and telecommunications equipment are located in the San Francisco Bay Area and Southern California, both regions known for seismic activity. Despite

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any precautions we may take, the occurrence of a natural disaster or other unanticipated problems at our hosting facilities could result in lengthy interruptions in our services.
We do not carry business interruption insurance sufficient to compensate us for the potentially significant losses, including the potential harm to the growth of our business that may result from interruptions in our service as a result of system failures.
If our security measures are compromised, or if our websites are subject to attacks that degrade or deny the ability of members or customers to access our solutions, or if our member data is compromised, members and customers may curtail or stop use of our solutions.
Our solutions involve the collection, processing, storage, sharing, disclosure and usage of members’ and customers’ information and communications, some of which may be private. We also work with third party vendors to process credit card payments by our customers and are subject to payment card association operating rules. We are vulnerable to software bugs, computer viruses, break-ins, phishing attacks, employee errors or malfeasance, attempts to overload our servers with denial-of-service or other attacks and similar disruptions from unauthorized use of our computer systems, any of which could lead to interruptions, delays, or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or confidential information. For example, in June 2012, approximately 6.5 million of our members’ encrypted passwords were stolen and published on an unauthorized website. If we experience compromises to our security that result in website performance or availability problems, the complete shutdown of our websites, or the actual or perceived loss or unauthorized disclosure or use of confidential information, such as credit card information, our members or customers may be harmed or lose trust and confidence in us, and decrease the use of our website, mobile applications and services or stop using our services in their entirety, and we would suffer reputational and financial harm.
In addition, we may be subject to regulatory investigations or litigation in connection with a security breach or related issue, and we could also be liable to third parties for these types of breaches. Such litigation, regulatory investigations and our technical activities intended to prevent future security breaches are likely to require additional management resources and expenditures. If our security measures fail to protect this information adequately or we fail to comply with the applicable credit card association operating rules, we could be liable to both our customers for their losses, as well as the vendors under our agreements with them, we could be subject to fines and higher transaction fees, we could face regulatory action, and our customers and vendors could end their relationships with us, any of which could harm our business and financial results.
If our members' profiles are out-of-date, inaccurate or lack the information that users and customers want to see, we may not be able to realize the full potential of our network, which could adversely impact our business.
If our members do not update their information or provide accurate and complete information when they join LinkedIn, or do not establish sufficient connections, the value of our network may be negatively impacted because our value proposition as a professional network and as a source of accurate and comprehensive data will be weakened. For example, customers of our Talent Solutions may not find members that meet their qualifications or may misidentify a candidate as having such qualifications, which could result in mismatches that erode customer confidence in our solutions, or our learning and development solutions may not suit our customers' needs. Similarly, incomplete or outdated member information would diminish the ability of our Marketing or Sales Solutions customers to reach their target audiences and our ability to provide our customers with valuable insights. Therefore, we must provide features and products that demonstrate the value of our network to our members and motivate them to contribute additional, timely and accurate information to their profile and our network. If we fail to successfully motivate our members to do so, our business and operating results could be adversely affected.
If we are unable to effectively operate on mobile devices, our business could be adversely affected.
The number of people who access online services through mobile devices, such as smart phones, handheld tablets and mobile telephones, as opposed to personal computers, has increased dramatically in the past few years and is projected to continue to increase. If the mobile solutions we have developed do not meet the needs of prospective members, current members or customers, they may not sign up or reduce their usage of our platform and our business could suffer. Additionally, we are dependent on the interoperability of LinkedIn with popular mobile operating systems, networks and standards that we do not control, such as Android and iOS operating systems, and any changes in such systems and terms of service that degrade our solutions’ functionality, give preferential treatment to competitive products or prevent our ability to promote advertising could adversely affect traffic and monetization on mobile devices. We may not be successful in maintaining and developing relationships with key

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participants in the mobile industry or in developing products that operate effectively with these technologies, systems, networks, or standards. Each manufacturer or distributor may establish unique technical standards for its devices, and our products and services may not work, or be easily accessible or viewable on these devices as a result. Some manufacturers may also elect not to include our products on their devices, or we may have difficulty preparing or loading our applications in app stores. As new devices and platforms are continually being released, it is difficult to predict the challenges we may encounter in developing versions of our solutions for use on these alternative devices, and we are devoting significant resources to the support and maintenance of such devices.
Growth in access to LinkedIn’s services through mobile devices as a substitute for access on personal computers may negatively affect our revenue and financial results.
Our members are increasingly accessing LinkedIn on mobile devices. While many of our members who use our online services on mobile devices also access LinkedIn through personal computers, we have seen substantial growth in mobile usage. We are devoting valuable resources to solutions related to monetization of mobile usage, and cannot assure you that these solutions will be successful. Our members are increasingly using mobile devices as a substitute for access to our online services as opposed to personal computers, and if we are unable to successfully implement monetization strategies for our solutions on mobile devices, or these strategies are not as successful as our offerings for personal computers, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.
The tracking of certain of our performance metrics is done with internal tools and is not independently verified. Certain of our performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
We track certain performance metrics, including number of registered members, unique visiting members and member page views, with internal tools, which are not independently verified by any third party. Our internal tools have a number of limitations and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including the metrics we report. If the internal tools we use to track these metrics undercount or overcount performance or contain algorithm or other technical errors, the data we report may not be accurate. In addition, limitations or errors with respect to how we measure data (or the data that we measure) may affect our understanding of certain details of our business, which could affect our longer term strategies. If our performance metrics are not accurate representations of our business, member base or traffic levels; if we discover material inaccuracies in our metrics; or if the metrics we rely on to track our performance do not provide an accurate measurement of our business, our reputation may be harmed and our operating and financial results could be adversely affected, causing our stock price to decline.
The number of our registered members is higher than the number of actual members and a substantial majority of our traffic is generated by a minority of our members. Our business may be adversely impacted if we are unable to attract and retain additional members who actively use our services.
The number of registered members in our network is higher than the number of actual members because some members have multiple registrations, other members have died or become incapacitated, and others may have registered under fictitious names or created fraudulent accounts. While the number of registered members represents what we believe to be reasonable estimates of our member base, there are inherent challenges in ensuring that the number of registered members presents an accurate reflection of our member network. For example, we do not have a reliable system for identifying and counting duplicate or fraudulent accounts, or deceased, incapacitated or other non-members and so we rely on estimates and assumptions, which may not be accurate. In addition, our methodology for measuring our membership numbers, and specifically for making estimates regarding non-members who should not be included as registered members, has changed over time and may continue to change from time to time. While we are using what we believe to be reasonable and appropriate methods of measuring the number of registered members, there are no methodologies available that would provide us with an exact number of non-actual member types of accounts. Therefore, we cannot assure you that our current or future methodologies are accurate, and we will need to continue to adjust them in the future from time to time, which could result in the number of registered members being lower or higher than expected. Further, a substantial majority of our members do not visit our websites on a monthly basis, and a substantial majority of our desktop and mobile traffic is generated by a minority of our members. If the number of our actual members does not meet our expectations, if the rate at which we add new members slows or declines or if we are unable to increase the breadth and frequency of our visiting members, then our business may not grow as fast as we expect.

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Our solutions and internal systems rely on software that is highly technical, and if it contains undetected errors, our business could be adversely affected.
Our solutions and internal systems rely on software that is highly technical and complex. In addition, our solutions and internal systems depend on the ability of our software to store, retrieve, process, and manage immense amounts of data. Our software has contained, and may now or in the future contain, undetected errors, bugs, or vulnerabilities. Some errors in our software may only be discovered after the code has been released for external or internal use. Errors or other design defects within our software may result in a negative experience for members or customers, delay product introductions or enhancements, or result in measurement or other errors. We also rely on third party software that may contain errors or bugs. Any errors, bugs, or defects discovered in our software or third party software we use could result in damage to our reputation, loss of members, loss of revenue, or liability for damages, any of which could adversely affect our business and financial results.
We collect, process, store, share, disclose and use personal information and other data, which subjects us to governmental regulations and other legal obligations related to privacy and security, and our actual or perceived failure to comply with such obligations could harm our business.
We collect, process, store, share, disclose and use information from and about our members, customers and users, including personal information and other data, and we enable our members to passively and proactively share their personal information with each other and with third parties and to communicate and share news and other information into and across our platform. There are numerous laws around the world regarding privacy and security, including laws regarding the collection, processing, storage, sharing, disclosure, use and security of personal information and other data from and about our members and users. The scope of these laws is changing, subject to differing interpretations, may be costly to comply with, and may be inconsistent among countries and jurisdictions or conflict with other rules.
We strive to comply with applicable laws, policies, and legal obligations and certain applicable industry codes of conduct (such as the Digital Advertising Alliance's self-regulatory principles for online behavioral advertising) relating to privacy and data protection and are subject to the terms of our privacy policies and privacy-related obligations to third parties. However, these obligations may be interpreted and applied in new ways and/or in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Data privacy and security are active areas and new laws and regulations are likely to be enacted.
Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to members, customers or other third parties, our data disclosure and consent obligations, or our privacy or security-related legal obligations, or any compromise of security that results in the unauthorized disclosure, transfer or use of personal or other information, which may include personally identifiable information or other member data, may result in governmental enforcement actions, litigation or public statements critical of us by consumer advocacy groups or others and could cause our members and customers to lose trust in us, which could have an adverse effect on our business. Additionally, if third parties we work with, such as customers, vendors or developers, violate applicable laws, our policies or other privacy or security-related obligations, such violations may also put our members’ information at risk and could in turn have an adverse effect on our business. Governmental agencies may also request or take member or customer data for national security or informational purposes, and also can make data requests in connection with criminal or civil investigations or other matters, which could harm our reputation and our business.
In addition, the EU-US Safe Harbor program (“Safe Harbor”), which provided a valid legal basis for transfers of personal data from Europe to the United States, was recently held to be invalid, which has a significant impact on the transfer of data from the European Union to US companies, including us. While we have other legally recognized mechanisms in place that we believe allow for the transfer of EU member and customer and employee information to the United States, it is possible that these mechanisms may also be challenged or evolve to include new legal requirements that could have an impact on how we move data from the European Union to LinkedIn entities outside the European Union. Recently, the United States and the European Union agreed in principle upon the Privacy Shield as a potential replacement for the Safe Harbor, but it has not yet been finalized, published or interpreted. The Privacy Shield may add significant requirements that could impact our business and result in substantial expense to implement, and it is unclear that it will be appropriate for us. In response to these regulatory changes, we may have to require some of our vendors who process personal data to take on additional privacy and security obligations, and some may refuse, causing us to incur potential disruption and expense related to our business processes. If our policies and practices, or those of our vendors, are, or are perceived to be, insufficient or if our members and customers have concerns regarding the transfer of data from the European Union to the United

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States, we could be subject to enforcement actions or investigations by individual EU Data Protection Authorities or lawsuits by private parties, member engagement could decline and our business could be negatively impacted.
Public scrutiny of Internet privacy and security issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our current products and solutions to our members and customers, thereby harming our business.
The regulatory framework for privacy and security issues worldwide is evolving and is likely to remain in flux for the foreseeable future. Various government and consumer agencies have also called for new regulation and changes in industry practices. Practices regarding the registration, collection, processing, storage, sharing, disclosure, use and security of personal and other information by companies offering online services have recently come under increased public scrutiny.
For example, the European Union is anticipated to enact a new General Data Protection Regulation, which will likely become effective in 2018. The General Data Protection Regulation is expected to result in significantly greater compliance burdens for companies with users and operations in the European Union and to provide for considerable fines of up to 4% of global annual revenues for noncompliance. The European Union is also considering an update to the EU’s Privacy and Electronic Communications (e-Privacy) Directive to, among other things, amend the current directive’s rules on the use of cookies.
In the United States, the federal government, including the White House, the Federal Trade Commission, the Department of Commerce and Congress, and many state governments are reviewing the need for greater regulation of the collection, processing, storage, sharing, disclosure, use and security of information concerning consumer behavior with respect to online services, including regulations aimed at restricting certain targeted advertising practices and collection and use of data from mobile devices. This review may result in new laws or the promulgation of new regulations or guidelines. For example, the State of California and other states have passed laws relating to disclosure of companies’ practices with regard to Do-Not-Track signals from Internet browsers, the ability to delete information of minors, and new data breach notification requirements. California has also adopted privacy guidelines with respect to mobile applications. Outside the European Union and the United States, a number of countries have adopted or are considering privacy laws and regulations that may result in significant greater compliance burdens.
In addition, government agencies and regulators have reviewed, are reviewing and will continue to review, the personal data practices of online media companies including our privacy and security policies and practices. The FTC in particular has approved consent decrees resolving complaints and their resulting investigations into the privacy and security practices of a number of online social media companies. These reviews can and have resulted in changes to our products and policies, and could result in additional changes in the future. If we are unable to comply with any such reviews or decrees that result in recommendations or binding changes, or if the recommended changes result in degradation of our products, our business could be harmed.
Our business, including our ability to operate and expand internationally or on new technology platforms, could be adversely affected if legislation or regulations are adopted, interpreted or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our websites, mobile applications, products, features or our privacy policy. In particular, the success of our business has been, and we expect will continue to be, driven by our ability to responsibly use data about our members. Therefore, our business could be harmed by any significant change to applicable laws, regulations or industry standards or practices regarding the storage, use or disclosure of data our members choose to share with us, or regarding the manner in which the express or implied consent of consumers for such use and disclosure is obtained. Such changes may require us to modify our products and features, possibly in a material manner, and may limit our ability to develop new products and features that make use of the data that we collect about our members.
Our business is subject to a variety of US and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business.
We are subject to a variety of laws in the United States and abroad, including laws regarding privacy, data protection, data security, data retention and consumer protection, accessibility, sending electronic messages, human resource services and the provision of online payment services, including credit card processing, which are continuously evolving and developing. In addition, some of our members are subject to laws and/or licensing or certification obligations that may restrict their ability to engage with LinkedIn’s online services. The scope and interpretation of the laws and other obligations that are or may be applicable to us or certain groups of our members

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are often uncertain and may be conflicting, particularly laws and other obligations outside the United States. For example, laws related to the online dissemination of content of others and laws related to sending messages over online service are continuing to evolve and are being tested pursuant to actions based on, among other things, invasion of privacy, defamation, spam, and other torts, unfair competition, copyright and trademark infringement, credit reporting and other theories based on the nature and content of the materials and messages sent or provided by others.
In addition, regulatory authorities around the world are considering a number of legislative and regulatory proposals concerning privacy, spam, data storage, data protection, content regulation, cybersecurity, government access to personal information and other matters that may be applicable to our business. Compliance with these laws may require substantial investment or may provide technical challenges for our business. It is also likely that as our business grows, evolves, and an increasing portion of our business shifts to mobile, and our solutions are used in a greater number of countries and additional groups, we will become subject to laws and regulations in additional jurisdictions. Further, as our services and solutions expand to include more content (including from third parties), additional laws and regulations may become applicable to our products and offerings including laws requiring us to restrict the availability of such content on a geographical basis or to certain groups of members. In some cases, laws and legal obligations of various jurisdictions may be ambiguous or conflict as to LinkedIn’s right to display and distribute certain content as part of its online services. Users of our site and our solutions could also abuse or misuse our products in ways that violate laws. It is difficult to predict how existing laws will be applied to our business and the new laws and legal obligations to which we may become subject.
If we are not able to comply with these laws or other legal obligations or if we (or our members) become liable under these laws or legal obligations, or if our services are suspended or blocked, we could be directly harmed, and we may be forced to implement new measures to reduce exposure to this liability. This may require us to expend substantial resources or to discontinue certain solutions, which would negatively affect our business, financial condition and results of operations. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. Any costs incurred as a result of this potential liability could harm our business and operating results.
We face competition in the market for online professional networks from social networking sites and Internet search companies, among others, as well as continued competition for customers.
We face significant competition in all aspects of our business, and we expect such competition to increase, particularly in the market for online professional networks and engagement of professionals.
Our industry is evolving rapidly and is becoming increasingly competitive. Larger and more established companies may focus on our market and could directly compete with us. Smaller companies, including application developers, could also launch new products and services that compete with us and that could gain market acceptance quickly. We may also face competition if we shift our focus of development to new or different products or separate areas of our business.
We expect our existing competitors in the markets for Talent Solutions, Marketing Solutions and Premium Subscriptions (including Sales Solutions) to continue to focus on these areas. A number of these companies may have greater resources than us, which may enable them to compete more effectively. Specifically, we are investing significantly in our Marketing Solutions products with respect to content and mobile solutions, and we may not be as successful as our competitors in generating revenue through new forms of content marketing or mobile advertising. Additionally, users of social networks may choose to use, or increase their use of, those networks for professional purposes, which may result in those users decreasing or eliminating their use of LinkedIn. Companies that currently focus on social networking could also expand their focus to professionals. We and other companies have historically established alliances and relationships with some of these companies to allow broader exposure to users and access to data on the Internet. We may also, in the future, establish alliances or relationships with other competitors or potential competitors. To the extent companies terminate such relationships and establish alliances and relationships with others, our business could be harmed. Additionally, other companies that provide content for professionals could develop more compelling offerings than ours. This could impact the engagement of our members, and could also compete with our Premium Subscriptions and adversely impact our ability to sell and renew subscriptions to our members. Specifically, we compete for members, enterprises and professional organizations as discussed below.
Members-professional networks. The space for online professional networks is rapidly evolving. Other companies such as Facebook, Google, Microsoft and Twitter are developing or could develop solutions that compete with ours. Further, some of these companies are partnering with third parties to offer products and

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services that could compete with ours. Additionally, we face competition from a number of companies outside the United States that provide online professional networking solutions. We also compete against smaller companies that focus on groups of professionals within a specific industry or vertical. Our competitors may announce new products, services or enhancements that better address changing industry standards or the needs of members and customers, such as mobile access or different market focus. Any such increased competition could cause pricing pressure, loss of business or decreased member activity, any of which could adversely affect our business and operating results. Internet search engines could also change their methodologies in ways that adversely affect our ability to optimize our page rankings within their search results.
Enterprises and professional organizations-Talent Solutions. With respect to our Talent Solutions, we compete with online recruiting companies, talent management companies and larger companies that are focusing on talent management and human resource services, job boards, traditional recruiting firms, and companies that provide learning and development products and services. Additionally, other companies, including newcomers to the recruiting or learning and development industries, may partner with Internet companies, including social networking companies, to provide services that compete with our solutions, either on their own or as third party applications. If the efficiency and usefulness of our products to enterprises and professional organizations do not exceed those provided by competitors, we will not be able to compete successfully.
Enterprises and professional organizations-Marketing Solutions. With respect to our Marketing Solutions, we compete with online and offline outlets that generate revenue from advertisers and marketers. To the extent competitors are better able to provide customers with cost-effective access to attractive demographics, either through new business models or increased user volume, we may not be successful in retaining our existing advertisers or attracting new advertisers, and our business would be harmed.
Enterprises and professional organizations-Premium Subscriptions/Sales Solutions. With respect to our Premium Subscriptions and Sales Solutions, we compete with online and offline companies for customers with lead generation and customer intelligence and insights. Our Sales Solutions product is in the early stages, and we may not be able to compete effectively in this area.
If we do not continue to attract new customers, or if existing customers do not renew their subscriptions, renew on less favorable terms, or fail to purchase additional solutions, we may not achieve our revenue projections, and our operating results would be harmed.
In order to grow our business, we must continually attract new customers, sell additional solutions to existing customers and reduce the level of non-renewals in our business. Our ability to do so depends in large part on the success of our sales and marketing efforts. We do not typically enter into long-term contracts with our customers, and even when we do, they can generally terminate their relationship with us. We may not accurately predict future trends with respect to rates of customer renewals, upgrades and expansions. Furthermore, the nature of our products and solutions is such that customers may decide to terminate or not renew their agreements with us without causing significant disruptions to their own businesses.
We must demonstrate that our Talent Solutions are important recruiting and learning and development tools for enterprises, professional organizations, and individuals and that our Marketing and Sales Solutions provide them with access to an audience of one of the most influential, affluent and highly educated audiences on the Internet. However, potential customers may not be familiar with our solutions or may prefer other or more traditional products and services for their talent, advertising and marketing needs.
Our customer base and our customers’ renewal rates may decline or fluctuate because of several factors, including the prices of our solutions, the prices of products and services offered by our competitors, reduced hiring by our customers or reductions in their talent or marketing spending levels due to macroeconomic or other factors and the efficacy and cost-effectiveness of our solutions. If we do not attract new customers or if our customers do not renew their agreements for our solutions, renew on less favorable terms, or do not purchase additional functionality or offerings, our revenue may grow more slowly than expected or decline.
Ultimately, attracting new customers and retaining existing customers requires that we continue to provide high quality solutions that our customers value. In particular, our Talent Solutions customers will discontinue their purchases of our solutions if we fail to effectively connect them with the talent they seek or provide learning and development opportunities that they are looking for, and our premium subscribers will discontinue their subscriptions if they do not find the networking and business opportunities that they value. Similarly, customers of our Marketing Solutions will not continue to do business with us if their advertisements do not reach their intended audiences. Therefore we must continue to demonstrate to our customers that using our Marketing Solutions is the

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most effective and cost-efficient way to maximize their results. Even if our Marketing Solutions are providing value to our customers, advertisers are sensitive to general economic downturns and reductions in consumer spending, among other events and trends, which generally results in reduced advertising expenditures and could adversely affect sales of our Marketing Solutions. In addition, we have recently expanded our Marketing Solutions products to include off-network advertising. This product area will complement our current offerings primarily sold on our wholly owned properties, and we may not be successful or our customers or members may not be receptive to these products. Finally, for our Sales Solutions products, we may not be able to retain existing customers or attract new customers if we fail to provide high quality solutions, if customers are unable to realize the value our solutions, or if we are not able to measure and demonstrate the value that our solutions provide.
We expect our operating results to fluctuate on a quarterly and annual basis, which may result in a decline in our stock price if such fluctuations result in a failure to meet the expectations of securities analysts or investors.
Our revenue and operating results have in the past and could in the future vary significantly from quarter-to-quarter and year-to-year and may fail to match our past performance, our projections or the expectations of securities analysts because of a variety of factors, many of which are outside of our control. Any of these events could cause the market price of our Class A common stock to fluctuate. Factors that may contribute to the variability of our operating results include:
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our ability to create value for our members as well as increase the size of our member base;
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engagement of our members and customers;
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our commitment to putting our members first even if it means forgoing short-term revenue opportunities;
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shifts in the way members and users access our websites and services from personal computers to mobile devices;
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disruptions or outages in the availability of our websites or services, actual or perceived breaches of privacy, and compromises of our member data;
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changes in our pricing policies or those of our competitors;
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our ability to increase sales of our products and solutions to new customers and expand sales of additional products and solutions to our existing customers;
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the size and seasonal variability of our customers’ recruiting, marketing and sales budgets;
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the extent to which existing customers renew their agreements with us and the timing and terms of those renewals;
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general industry and macroeconomic conditions, in particular, deterioration in labor markets, which would adversely impact sales of our Talent Solutions, or economic growth that does not lead to job growth, for instance increases in productivity;
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the cost of investing in our technology infrastructure, product initiatives, facilities and international expansion may be greater than we anticipate;
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our needs related to facilities may change over time and vary from our original forecasts, and the value of the property that we lease or own may fluctuate;
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expenses related to hiring, incentivizing and retaining employees;
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the timing and costs of expanding our field sales organization and delays or inability in achieving expected productivity;
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the timing of certain expenditures, including hiring of employees and capital expenditures;
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the entrance of new competitors in our market whether by established companies or the entrance of new companies;
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currency exchange rate fluctuations;
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our ability to integrate acquisitions and realize the expected benefit of such acquisitions in a timely manner or at all; and
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changing tax laws and regulations.
Our historical operating results may not be indicative of our future operating results. We believe our rapid growth has masked the cyclicality and seasonality of our business. As our revenue growth rate has slowed, the cyclicality and seasonality in our business has become more pronounced, and we expect that to continue. This has, and will, cause our operating results to fluctuate. In addition, global economic concerns continue to create uncertainty and unpredictability and add risk to our future outlook. Sovereign debt issues and economic uncertainty in the United States, Europe and around the world raise concerns in markets important to our business. An economic downturn in any particular region in which we do business or globally could result in reductions in sales of our products, decreased renewals of existing arrangements and other adverse effects that could harm our operating results.

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We expect our revenue growth rate to decline, and, as our costs increase, we may not be able to generate sufficient revenue to sustain profitability over the long term.
From 2010 to 2015, our annual net revenue grew from $243.1 million to $2,990.9 million, which represents a compounded annual growth rate of approximately 65.2%. As our net revenue has increased, our revenue growth rate has slowed, and we expect that it will continue to decline over time. We also expect that the growth rates of each of our primary product lines will fluctuate and that these product lines may not grow at the same rate. In recent years, and continuing in 2016, our philosophy has been to invest for future growth. We expect to continue to expend substantial financial and other resources on:

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our technology infrastructure, including architecture, development tools scalability, availability, performance and security, as well as disaster recovery measures;
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product development, including investments in our product development team and the development of new features for both members and customers;
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sales and marketing, including a significant expansion of our field sales organization;
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international expansion in an effort to increase our member base, member activity and sales;
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general administration, including legal and accounting expenses related to our expanding global presence and the integration of newly acquired businesses; and
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capital expenditures, including facilities and build-out of our data centers.

These investments may not result in increased revenue or business growth, or increased network growth or member value, and will increase our expenses. Even if our revenue continues to increase, we expect that due to increased expenses, in particular, stock-based compensation, depreciation and amortization and provision for income taxes, we may incur a US GAAP loss during future periods. If we fail to continue to grow our revenue and overall business, our operating results and business would be harmed.
If we fail to effectively manage our growth, our business and operating results could be harmed.
We continue to experience rapid growth in our headcount and operations, which will continue to place significant demands on our management and our operational and financial infrastructure. As of December 31, 2015, approximately 35% of our employees had been with us for less than one year and approximately 59% for less than two years. As we continue to grow, we must effectively integrate, develop and motivate a large number of new employees in various countries around the world, and we must maintain the beneficial aspects of our corporate culture. We intend to continue to make substantial investments to expand our engineering, research and development, field sales, and general and administrative organizations, and our international operations. To attract top talent, we have had to offer, and believe we will need to continue to offer, highly competitive compensation packages before we can validate the productivity of those employees. In addition, fluctuations in the price of our Class A common stock may make it more difficult or costly to use equity compensation to motivate, incentivize and retain our employees. We face significant competition for talent from other Internet and high-growth companies, which include both publicly traded and privately-held companies. The risks of over-hiring (especially given overall macroeconomic risks) or over-compensating employees and the challenges of integrating a rapidly growing employee base into our corporate culture are exacerbated by our international expansion. Additionally, because of our growth, we have significantly expanded our operating lease and purchase commitments, which have increased our expenses. We may not be able to hire new employees quickly enough to meet our needs. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to meet our forecasts and our employee morale, productivity and retention could suffer, and our business and operating results could be adversely affected.
Additionally, if we do not effectively manage the growth of our business and operations, the quality of our solutions could suffer, which could negatively affect our brand, operating results and overall business. Further, we have made changes in the past, and will make changes in the future, to our features, products and services that our members or customers may not like, find useful or agree with. We may also decide to discontinue certain features, products or services, or charge for certain features, products or services that are currently free or increase fees for any of our features, products or services. If members or customers are unhappy with these changes, they may decrease their engagement on our site, or stop using features, products or services or the site generally. In addition, they may choose to take other types of action against us such as organizing petitions or boycotts focused on our company, our website or any of our services, filing claims with the government or other regulatory bodies, or filing lawsuits against us. Any of these actions could negatively impact our member growth and engagement and our brand, which would harm our business. To effectively manage this growth, we will need to continue to improve our operational, financial and management controls, and our reporting systems and procedures by, among other things:

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improving our information technology infrastructure to maintain the effectiveness of our solutions;
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enhancing information and communication systems to ensure that our employees and offices around the world are well-coordinated and can effectively communicate with each other and our growing base of members, enterprises and professional organizations;
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enhancing our internal controls to ensure timely and accurate reporting of all of our operations; and
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appropriately documenting our information technology systems and our business processes.
These systems enhancements and improvements will require significant capital expenditures and allocation of valuable management and employee resources. If we fail to implement these improvements effectively, our ability to manage our expected growth and comply with the rules and regulations that are applicable to publicly reporting companies will be impaired.
We depend on world class talent to grow and operate our business, and if we are unable to hire, retain and motivate our personnel, we may not be able to grow effectively.
Our future success will depend upon our continued ability to identify, hire, develop, motivate and retain world class talent. Our ability to execute efficiently is dependent upon contributions from all of our employees, in particular our senior management team. Key institutional knowledge remains with a small group of long-term employees whom we may not be able to retain. We may not be able to retain the services of any of our long-term employees or other members of senior management in the future. We do not have employment agreements other than offer letters with any of our key employees, and we do not maintain key person life insurance for any employee. In addition, from time to time, there may be changes in our senior management team that may be disruptive to our business. If our senior management team, including any new hires that we may make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be harmed.
Our growth strategy also depends on our ability to expand and retain our organization with world class talent. Identifying, recruiting, training and integrating qualified individuals will require significant time, expense and attention. In addition to hiring new employees, we must continue to focus on retaining our best talent. Competition for these resources, particularly for engineers, is intense, and competition for the facilities to house our employees is also intense, specifically in the San Francisco Bay Area, where our headquarters is located. We may need to invest significant amounts of cash and equity for new and existing employees and we may never realize returns on these investments, and we also are investing heavily in our facilities. If we are not able to effectively increase and retain our talent, our ability to achieve our strategic objectives will be adversely impacted, and our business will be harmed.
Our international operations account for a significant portion of our revenue and are subject to increased challenges and risks.
We have offices around the world and our websites and mobile applications are available in numerous languages. For the year ended December 31, 2015, international revenue represented 38% of our total revenue. We expect to continue to expand our international operations in the future by opening offices in different countries and expanding our offerings in new languages. Our ability to manage our business and conduct our operations internationally, including in emerging markets, requires considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal systems, alternative dispute resolution systems, regulatory systems and commercial infrastructures. International expansion has required and will continue to require us to invest significant funds and other resources. Operating internationally subjects us to new risks and may increase risks that we currently face, including risks associated with:

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recruiting and retaining talented and capable employees in foreign countries, and maintaining our company culture across all of our offices;
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providing solutions across a significant distance, in different languages, in competitive market environments and among different cultures, including modifying, or in some cases building entirely new services, solutions and features to ensure that they are culturally relevant in different countries and conforming to local laws and regulations, which may include modifying or blocking content in certain jurisdictions if it is deemed objectionable or unlawful;
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increased competition from local websites and services that provide online professional networking solutions, online recruitment services and learning and development products, which may benefit from first-mover advantages. These competitors have expanded and may continue to expand their geographic footprint;

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differing and potentially lower levels of member growth and activity in new and nascent geographies;
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compliance with applicable foreign laws and regulations, which may change or conflict with each other, require us to take on additional compliance obligations and practices as well as the potential risk of penalties to individual members of management if our practices are deemed to be out of compliance;
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longer payment cycles in some countries;
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credit risk and higher levels of payment fraud;
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stringent local labor laws and regulations;
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laws and regulations that favor local competitors or prohibit or limit foreign ownership of businesses;
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legal regimes where the application of laws and regulations is subject to greater uncertainty, as well as higher risk of corruption, fraud and unethical business practices, and compliance with anti-bribery laws;
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implementing and maintaining effective internal processes and controls;
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compliance with various economic and trade sanctions regulations which restrict certain conduct of business;
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currency exchange rate fluctuations and controls;
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political or social unrest, or, economic instability in some countries;
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laws and proposed legislation relating to data localization in various countries, which may restrict our ability to do business in new and existing markets;
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double taxation of our non-US earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate; and
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higher costs of doing business internationally.
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 activity with our websites and services.
Finally, in late 2013, we established a joint venture to expand our operations in the People’s Republic of China ("PRC"), which is in its early stages. Although we believe this joint venture and our activities in the PRC comply with existing laws, they involve unique risks, and the PRC is actively considering changes in its foreign investment rules that could impact this structure and our activities. There are substantial uncertainties regarding the interpretation of PRC laws and regulations, and it is possible that the government will ultimately take a view contrary to ours. We may be unable to continue to operate in the PRC if we or our affiliates are unable to access sufficient funding or enforce contractual relationships with respect to management and control of such business. In addition, the PRC’s laws and regulations, as they apply to our business operations in Mainland China, have resulted in modifications to our products and services in Mainland China. For example, the PRC government has laws and regulations that govern the dissemination of content over the Internet, and it may enact additional laws or regulations in the future related to content, privacy, security and government access to personal information in a way that may materially impact our ability to conduct operations in the PRC. Failure to comply with these requirements may mean that we will not obtain or retain necessary licenses to operate all or some of our services in Mainland China, or result in the blocking of our services in Mainland China. In addition, our compliance with these rules could harm our business, reputation and brand outside of China. We will need to allocate significant resources to developing our presence in China, and we may not be successful in doing so.
Our business depends on a strong and trusted brand, and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our base of members, enterprises and professional organizations, our ability to increase their level of engagement and our ability to attract and retain high level employees.
We have developed a strong and trusted brand that we believe has contributed significantly to the success of our member network and business. Our brand is predicated on the idea that individual professionals will trust us and find immense value in building and maintaining their professional identities and reputations on our platform, as well as investing in their professional learning and knowledge. Maintaining, protecting and enhancing the “LinkedIn” brand and our other key brands is critical to expanding our base of members, enterprises, advertisers, corporate customers and other partners, and increasing their engagement with our services, and will depend largely on our ability to maintain member trust, be a technology leader and continue to provide valuable and high-quality solutions, which we may not do successfully. Despite our efforts to protect our brands and prevent misuse, if others misuse our brands or pass themselves off as being endorsed or affiliated with us, it could harm our reputation and our business could suffer. If our members or potential members determine that they can use other platforms, such as social networks, for the same purposes as or as a replacement for our network, or if they choose to blend their professional and social networking activities, our brand and our business could be harmed. Our members or

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customers could find that new products or features that we introduce are difficult to use or may feel that they degrade their experience with online service offered by LinkedIn, which could harm our reputation for delivering high-quality products. Our brand is also important in attracting and maintaining high performing employees. If we do not successfully maintain a strong and trusted brand, our business could be harmed.
We may not be able to halt the operations of online services that aggregate our data as well as data from other companies, including social networks, or copycat online services that have misappropriated our data in the past or may misappropriate our data in the future. These activities could harm our brand and our business.
From time to time, third parties have accessed data from our networks through scraping, robots or other means and used this data or aggregated this data on their online services with other data. In addition, “copycat” online services have misappropriated data on our network and attempted to imitate our brand or the functionality of our services, and these services or others could use similar tactics to develop products that compete with ours. These activities could degrade our brand, negatively impact our website performance and harm our business. When we have become aware of such online services, in many instances we have employed contractual, technological or legal measures in an attempt to halt unauthorized activities, but these measures may not be successful. In addition, if our customers do not comply with our terms of service, they also may be able to abuse our products and services and provide access to our solutions to unauthorized users. However, we may not be able to detect any or all of these types of activities in a timely manner and, even if we could, technological and legal measures may be insufficient to stop their operations. In some cases, particularly in the case of online services operating from outside of the United States, our available legal remedies may not be adequate to protect our business against such activities. Regardless of whether we can successfully enforce our rights against these parties, any measures that we may take could require us to expend significant financial or other resources.
Failure to protect or enforce our intellectual property rights could harm our business and operating results.
We regard the protection of our trade secrets, copyrights, trademarks, trade dress, databases, domain names and patents as critical to our success. We strive to protect our intellectual property rights by relying on federal, state and common law rights and other rights provided under foreign laws. These laws are subject to change at any time and could further restrict our ability to protect our intellectual property rights. In addition, the existing laws of certain foreign countries in which we operate may not protect our intellectual property rights to the same extent as do the laws of the United States. We also have a practice of entering into confidentiality and invention assignment agreements with our employees and contractors, and often enter into confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure and use of, our proprietary information. In addition, from time to time we make our intellectual property rights available to others under license agreements. However, these contractual arrangements and the other steps we have taken to protect our intellectual property rights may not prevent the misappropriation of our proprietary information, infringement of our intellectual property rights or deter independent development of similar or competing technologies by others and may not provide an adequate remedy in the event of such misappropriation or infringement.
Obtaining and maintaining effective intellectual property rights is expensive, including the costs of defending our rights. We are seeking to protect our trademarks and patents, and other intellectual property rights in a number of jurisdictions, a process that is expensive and may not be successful in all jurisdictions for every such right. Even where we have such rights, they may later be found to be unenforceable or have a limited scope of enforceability. In addition, we may not seek to pursue such protection in every location. In particular, we believe it is important to maintain, protect and enhance our brands. Accordingly, we pursue the registration of domain names and our trademarks and service marks in the United States and in many locations outside the United States. We have already and may, over time, increase our investment in protecting innovations through investments in patents and similar rights, and this process is expensive and time-consuming.
Litigation may be necessary to enforce our intellectual property rights, protect our proprietary rights or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and operating results. We may also incur significant costs in enforcing our trademarks against those who attempt to imitate our “LinkedIn” brand and other valuable trademarks and service marks.
In addition, we have chosen to make certain of our technology available under open source licenses that allow others to use the technology without payment to us. While we hope to benefit from these activities by having access

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to others’ useful technology under open source licenses, there is no assurance that we will receive the business benefits we expect.

If we fail to maintain, protect and enhance our intellectual property rights, our business and operating results may be harmed, and the market price of our Class A common stock could decline.
We are, and expect in the future to be, subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could materially harm our business and operating results.
We are party to lawsuits and legal proceedings in the normal course of business. These matters are often expensive and disruptive to normal business operations. We are currently facing, or may face in the future, allegations, lawsuits and regulatory inquiries, audits and investigations regarding data privacy, security, labor and employment, consumer protection, the Fair Credit Reporting Act and intellectual property infringement, including claims related to privacy, patents, publicity, trademarks, copyrights and other rights. We may also face allegations or litigation related to our acquisitions, securities issuances or our business practices, including public disclosures about our business. Litigation and regulatory proceedings, and particularly the patent infringement and class action matters we are facing or may face, may be protracted and expensive, and the results are difficult to predict. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages, and include claims for injunctive relief. Additionally, our litigation costs can be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our products and features or require us to stop offering certain features, all of which could negatively impact our membership and revenue growth. Additionally, we are subject to periodic audits, which would likely increase our regulatory compliance costs, and may require us to change our business practices, which could negatively impact our revenue growth. Managing legal proceedings, litigation and audits, even if we achieve favorable outcomes, is time-consuming and diverts management’s attention from our business.
In addition, we use open source software in our solutions and plan to continue to use open source software in the future. The terms of many open source licenses have not been interpreted by United States or other courts, and these licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our products. We may face claims from others claiming ownership of open source software or patents related to that software, or breach of open source license terms, including a demand for release of material portions of our source code or otherwise seeking to enforce the terms of the applicable open source license. These claims could also result in litigation, which could be costly to defend, require us to purchase a costly license, require us to establish additional specific open source compliance procedures, or require us to devote additional research and development resources to remove open source elements from or otherwise change our solutions, any of which would have a negative effect on our business and operating results. In addition, if we were to combine our own software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of some software that would be valuable to keep as a trade secret and/or not make available for use by others which would have a material adverse effect on our business, results of operations or financial condition.
The results of regulatory proceedings, litigation, claims and audits cannot be predicted with certainty, and determining reserves for pending litigation and other legal, regulatory and audit matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are not resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or, resolve them, could harm our business, our operating results, our reputation or the market price of our Class A common stock.
Because we recognize most of the revenue from our Talent Solutions and our Premium Subscriptions over the term of the agreement, a significant downturn in these businesses may not be immediately reflected in our operating results.
We recognize most of the revenue from sales of our Talent Solutions and Premium Subscriptions (which include Sales Solutions) over the terms of the agreements, which is typically 12 months. As a result, a significant portion of the revenue we report in each quarter is generated from agreements entered into during previous quarters. Consequently, a decline in new or renewed agreements in any one quarter may not significantly impact our revenue in that quarter but will negatively affect our revenue in future quarters. In addition, we may be unable to adjust our fixed costs in response to reduced revenue. Accordingly, the effect of significant declines in the sales of these offerings may not be reflected in our short-term results of operations.

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The effectiveness of our Marketing Solutions depends in part on our relationships with advertising serving technology companies and the continued use of display advertising.
We do and will rely, in part, on advertising serving technology companies to deliver our Marketing Solutions product. We may not be successful in entering into agreements on advantageous terms, our existing agreements with these companies may not be extended or renewed after their respective expirations, or we may not be able to extend or renew our agreements on terms and conditions favorable to us. If these agreements are terminated, we may not be able to enter into agreements with alternative companies on acceptable terms or on a timely basis or both, which could negatively impact revenue from our Marketing Solutions. In addition, the use of display advertising is declining and we face challenges coping with ad blocking technologies that have been developed and are likely to continue to be developed that can block the display of advertisements.
Enterprises or professional organizations, including governmental agencies, may restrict access to our services, which could lead to the loss or slowing of growth in our member base or the level of member engagement.

Our solutions depend on the ability of our members to access the Internet and our services. Enterprises or professional organizations, including governmental agencies, could block or restrict access to our online services, website or the Internet generally for a number of reasons such as security or confidentiality concerns or regulatory reasons, or they may adopt policies that prohibit listing the employers’ names on the employees’ LinkedIn profiles in order to minimize the risk that employees will be contacted and hired by other employers.

In some cases, certain governments may seek to restrict the Internet or our service providers’ websites, services and solutions and the performance of our websites, services and solutions could be suspended, blocked (in whole or part) or otherwise adversely impacted in these jurisdictions. For example, the government of the People’s Republic of China has blocked access to many social networking and other sites (including ours for a brief period), and certain self-regulatory organizations have policies that could result in access to our content, services or features being blocked. Any restrictions on the use of our services by our members and users could lead to the loss or slowing of growth in our member base or the level of member engagement.
If Internet search engines’ methodologies are modified or our search result page rankings decline for other reasons, our member and non-member engagement could decline.
We depend in part on various Internet search engines to direct a significant amount of traffic to our website. Similarly, we depend on providers of mobile application “store fronts” to allow users to locate and download our mobile applications that enable our service. Our ability to maintain the number of visitors directed to our website and users of our online services is not entirely within our control. Our competitors’ search engine optimization, or SEO, efforts may result in their websites receiving a higher search result page ranking than ours, or Internet search engines could revise their methodologies in an attempt to improve their search results, which could adversely affect the placement of our search result page ranking. If search engine companies modify their search algorithms in ways that are detrimental to our new user growth or in ways that make it harder for our members to use our website, or if our competitors’ SEO efforts are more successful than ours, overall growth in our member base could slow, member and non-member engagement could decrease, and we could lose existing members. These modifications may be prompted by search engine companies entering the online professional networking market or aligning with competitors. Our website has experienced fluctuations in search result rankings in the past, and we anticipate similar fluctuations in the future. Any reduction in the number of users directed to our websites would harm our business and operating results.
Our business depends on continued and unimpeded access to the Internet and mobile networks by us and our members on personal computers and mobile devices. If government regulations relating to the Internet or mobile networks or other areas of our business change, if Internet access providers are able to block, degrade, or charge for access to certain of our products and services, or if third parties disrupt access to the Internet, we could incur additional expenses and the loss of members and customers.
Our products and services depend on the ability of our members and customers to access our online services through their personal computers and mobile devices. Currently, this access is provided by companies that have significant market power in the broadband and Internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies, and government-owned service providers, any of whom could take actions that degrade, disrupt, or increase the cost of user access to our products or solutions, which would, in turn, negatively impact our business. In addition, Internet or network access could be disrupted by

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other third parties. Further, the adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet and mobile networks, including laws limiting Internet neutrality, could decrease the demand for our subscription service or the usage of our services and increase our cost of doing business.

Our growth depends in part on the success of our strategic relationships with third parties.
We anticipate that we will continue to depend on relationships with various third parties, including access to platforms and content providers and distributors to grow our business, authors who provide content (including learning and development material), and channel partners. Identifying, negotiating and maintaining relationships with third parties require significant time and resources, as does integrating third-party content and technology. Our agreements with technology and content providers and similar third parties are typically non-exclusive and do not prohibit them from working with our competitors or from offering competing services. In some cases, in particular, with respect to content providers, these relationships are undocumented, or, if there are agreements in place, they may be easily terminable. Our competitors may be effective in providing incentives to these parties to favor their solutions or may prevent us from developing strategic relationships with these parties. These third parties may decide that working with LinkedIn is not in their interest. In addition, these third parties may not perform as expected under our agreements with them, and we have had, and may in the future have, disagreements or disputes with these parties, which could negatively affect our brand and reputation. It is possible that these third parties may not be able to devote the resources we expect to the relationship or they may terminate their relationships with us. Further, as users increasingly access our services through mobile devices, we are becoming more dependent on the distribution of our mobile applications through third parties, and we may not be able to access their application program interfaces or be able to distribute our applications or provide ease of integration, and this may also impact our ability to monetize our mobile products. If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the marketplace or to grow our business could be impaired, and our operating results would suffer. Even if we are successful, these relationships may not result in improved operating results.
If currency exchange rates fluctuate substantially in the future, the results of our operations, which are reported in US dollars, could be adversely affected.
As we continue to expand our international operations, we become more exposed to the effects of fluctuations in currency exchange rates. We incur expenses for employee compensation and other operating expenses at our non-US locations in the local currency, and accept payment from customers in currencies other than the US dollar. Since we conduct business in currencies other than US dollars but report our financial results in US dollars, we face exposure to fluctuations in currency exchange rates. Consequently, exchange rate fluctuations between the US dollar and other currencies could have a material impact on our profitability, and because we recognize revenue over time, exchange rate fluctuations at one point in time may have a negative impact in future quarters. Although we hedge a portion of our foreign currency exposure, significant fluctuations in exchange rates between the US dollar and foreign currencies may adversely affect our net income (loss). Additionally, hedging programs rely on our ability to forecast accurately and could expose us to additional risks that could adversely affect our financial condition and results of operations.
The intended tax efficiency of our corporate structure and intercompany arrangements depend on the interpretation and application of the tax laws of various jurisdictions and on how we operate our business, and changes to our effective tax rate could adversely impact our results.
Our corporate structure and intercompany arrangements, including the manner in which we develop and use our intellectual property and the transfer pricing of our intercompany transactions, are intended to optimize business efficiency as well as reduce our worldwide effective tax rate. The application of the tax laws of various jurisdictions, including the United States and the other jurisdictions in which we operate, to our international business activities is subject to interpretation and depends on our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for valuing developed technology or for transfer pricing on intercompany arrangements. In particular, our non-US headquarters is located in Dublin, Ireland, but tax authorities in other jurisdictions where we operate may make a determination that the manner in which we operate results in our business not achieving the intended tax consequences. This could increase our worldwide effective tax rate and harm our financial position and results of operations. Our effective tax rate could be adversely affected by several other factors, many of which are outside of our control, such as: increases in expenses that are not deductible for tax purposes, the tax effects of restructuring charges or purchase accounting for acquisitions, increases in withholding taxes, changes related to our ability to ultimately realize future benefits attributed to our deferred tax

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assets, including those related to other-than-temporary impairment, and a change in our decision to indefinitely reinvest foreign earnings. Further, we are currently undergoing review and audit by both domestic and foreign tax authorities and expect such actions to continue in the future. Any adverse outcome of such a review or audit could have a negative effect on our operating results and financial condition.
The enactment of legislation implementing changes in the US taxation of international business activities, the adoption of other tax reform policies or changes in tax legislation or policies in jurisdictions outside the United States could materially impact our financial position and results of operations.
Possible future changes to US tax laws, including limitations on the ability of taxpayers to claim and utilize foreign tax credits and the deferral of certain tax deductions until earnings outside of the United States are repatriated to the United States, as well as changes to US tax laws that may be enacted in the future, could impact the tax treatment of our foreign earnings and adversely impact our effective tax rate. Due to the large and expanding scale of our international business activities, any changes in the US or international taxation of such activities may increase our worldwide effective tax rate and harm our financial position and results of operations.
The tax authorities in Ireland have announced changes to the treatment of non-resident Irish entities, commonly used in a “double Irish” structure. The changes will impact newly created Irish entities immediately but are not expected to impact existing non-resident Irish entities, such as ours, until after December 31, 2020. These changes may adversely impact our effective tax rate and harm our financial position and results of operations. The United Kingdom has also recently enacted new tax legislation, and Australia has proposed new tax legislation, on diverted profits which may ultimately impact our foreign tax liability and negatively impact our effective tax rate and results of operations.
Additionally, the Organisation for Economic Co-Operation and Development recently released final guidance covering various topics, including addressing the “tax challenges of the digital economy,” country-by-country reporting, and definitional changes to permanent establishment, which could ultimately impact our tax liabilities to foreign jurisdictions and treatment of our foreign earnings from a US perspective which may adversely impact our effective tax rate and harm our financial position and results of operations.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features and products or enhance our existing solutions, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we have engaged and may continue to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A common stock. Any debt financing we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.
Acquisitions and investments could result in operating difficulties, dilution, and other harmful consequences that may adversely impact our business and results of operations.
We have made and will continue to make acquisitions to add employees, complementary companies, products, technologies or revenue. These transactions could be material to our financial condition and results of operations. We also expect to continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions. The identification of suitable acquisition candidates can be difficult, time-consuming and costly, and we may not be able to complete acquisitions on favorable terms, if at all. The process of integrating an acquired company, business, or technology has created, and will continue to create, unforeseen operating difficulties and expenditures. The areas where we face risks include:

•
loss of key employees of the acquired company and other challenges associated with integrating new employees into our culture, as well as reputational harm if integration is not successful;

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•
diversion of management time and focus from operating our business to acquisition integration challenges;
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implementation or remediation of controls, procedures, and policies at the acquired company;
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integration of the acquired company’s accounting, human resource, and other administrative systems, and coordination of product, engineering, and sales and marketing function;
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assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability;
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failure to successfully further develop the acquired technology;
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difficulty of transitioning the acquired technology onto our existing platforms and maintaining the security standards for such technology consistent with our other services;
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failure to successfully onboard customers or maintain brand quality of acquired companies;
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liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities;
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failure to generate the expected financial results related to an acquisition on a timely manner or at all; and
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failure to accurately forecast the impact of an acquisition transaction.
These risks or other problems encountered in connection with our acquisitions and investments could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and adversely affect our business generally.
Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, amortization expenses, or write-offs of goodwill, any of which could harm our financial condition. In addition, any acquisitions we announce could be viewed negatively by users, marketers, developers or investors.
Risks Related to Our Class A Common Stock
The dual class structure of our common stock as contained in our charter documents has the effect of concentrating voting control with those stockholders who held our stock prior to our initial public offering, including our founders and our executive officers, employees and directors and their affiliates, and limiting our other stockholders’ ability to influence corporate matters.
Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share. Stockholders who hold shares of our Class B common stock, including our founders, and our executive officers, employees and directors and their affiliates, together held approximately 57.2% of the voting power of our outstanding capital stock as of December 31, 2015. Our co-founder and Chair, Reid Hoffman, held approximately 11.0% of the outstanding shares of our Class A and Class B common stock, representing approximately 53.2% of the voting power of our outstanding capital stock as of December 31, 2015. Mr. Hoffman has significant influence over the management and affairs of the company and over all matters requiring stockholder approval, including election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets. Mr. Hoffman will continue to have significant influence over these matters in the future.
In addition, the holders of our Class B common stock collectively will continue to be able to control all matters submitted to our stockholders for approval even though their stock holdings represent less than 50% of the outstanding shares of our common stock. Because of the 10-to-1 voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively will continue to control a majority of the combined voting power of our common stock even when the shares of Class B common stock represent as little as 10% of the combined voting power of all outstanding shares of our Class A and Class B common stock. This concentrated control will limit the ability of our Class A stockholders to influence corporate matters for the foreseeable future, and, as a result, the market price of our Class A common stock could be adversely affected.
If Mr. Hoffman continues to retain a significant portion of his holdings of Class B common stock for an extended period of time, he could continue to control a majority of the combined voting power of our Class A and Class B common stock. As a board member, Mr. Hoffman owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. As a stockholder, even a controlling stockholder, Mr. Hoffman is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally.

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Our stock price has been volatile in the past and may be subject to volatility in the future.
The trading price of our Class A common stock has been volatile historically, and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. During 2015, the closing price of our Class A common stock ranged from $169.94 to $270.76, and during 2016 to date, the closing price has been as low as $100.98. Fluctuations in the valuation of companies perceived by investors to be comparable to us or in valuation metrics, such as our price to earnings ratio, could impact our stock price. Additionally, the stock markets have at times experienced extreme price and volume fluctuations that have affected and might in the future affect the market prices of equity securities of many companies. These fluctuations have, in some cases, been unrelated or disproportionate to the operating performance of these companies. Further, the trading prices of publicly traded shares of companies in our industry have been particularly volatile and may be very volatile in the future. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes, international currency fluctuations or political unrest, may negatively impact the market price of our Class A common stock. In addition, our stock price may fluctuate based on whether our performance or guidance as to our future performance meets the expectations of our investors or securities analysts. Volatility in our stock price also impacts the value of our equity compensation, which affects our ability to recruit and retain employees. We may incur additional cash expense in connection with recruiting and retention costs, and we may also experience increased dilution because of the need to provide more equity as part of our overall compensation packages. In addition, some companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, may have the effect of delaying or preventing a change of control or changes in our management. Our certificate of incorporation and bylaws include provisions that:
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authorize our board of directors to issue, without further action by the stockholders, up to 100,000,000 shares of undesignated preferred stock;
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require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;
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specify that special meetings of our stockholders can be called only by our board of directors, the Chair of our board of directors, or our Chief Executive Officer;
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establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;
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establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving three-year staggered terms;
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prohibit cumulative voting in the election of directors;
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provide that our directors may be removed only for cause;
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provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;
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require the approval of our board of directors or the holders of a supermajority of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation; and
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reflect two classes of common stock, as discussed above.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. Provisions in the indenture related to our convertible debt may also deter or prevent a business combination. In addition, institutional shareholder representative groups, shareholder activists and others may disagree with our corporate governance provisions or other practices, including our dual class structure and the other anti-takeover provisions, such as those listed above. We generally will consider recommendations of institutional shareholder representative groups, but we will make decisions based on what our board and management believe to be in the best long term interests of our company and stockholders. Our dual class structure concentrates the voting power of our stock in a small group of stockholders who would have the ability to control the outcome of a stockholder vote. Additionally, these groups could make

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recommendations to our stockholders against our practices or our board members if they disagree with our positions. Finally, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
If securities or industry analysts publish reports that are interpreted negatively by the investment community or publish negative research reports about our business, our share price and trading volume could decline.
The trading market for our Class A common stock depends, to some extent, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts or the information contained in their reports. If one or more analysts publish research reports that are interpreted negatively by the investment community, or have a negative tone regarding our business, financial or operating performance, industry or end-markets, our share price could decline. In addition, if a majority of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
We do not intend to pay dividends for the foreseeable future.
We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.
Risks Related to our Convertible Notes
Servicing our convertible notes may require a significant amount of cash, and we may not have sufficient cash flow or the ability to raise the funds necessary to satisfy our obligations under the convertible notes, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the convertible notes.
In November 2014, we issued approximately $1.3 billion aggregate principal amount of 0.50% convertible senior notes due 2019 (the "Notes"). As of December 31, 2015, we had a total par value of approximately $1.3 billion of outstanding Notes. Holders of the Notes will have the right to require us to repurchase all or a portion of their notes upon the occurrence of a fundamental change before the relevant maturity date, in each case at a repurchase price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the fundamental change repurchase date. In addition, upon conversion of the Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional shares), we will be required to make cash payments in respect of the Notes being converted. Moreover, we will be required to repay the Notes in cash at their maturity, unless earlier converted or repurchased.
Our ability to make cash payments in connection with conversions of the Notes or repurchase the Notes in the event of a fundamental change will depend on market conditions and our future performance, which is subject to economic, financial, competitive and other factors beyond our control. We also may not use the cash raised through the issuance of the Notes in an optimally productive and profitable manner. At the time we are required to make repurchases of the Notes being surrendered or converted at their maturity, we may not have enough available cash or be able to obtain financing to refinance the Notes on commercially reasonable terms or at all. Our level of indebtedness could adversely affect our future operations by increasing our vulnerability to adverse changes in general economic and industry conditions by limiting or prohibiting our ability to obtain additional financing for future capital expenditures, acquisitions and general corporate and other purposes. If we are unable to make cash payments upon conversion of the Notes we would be required to issue significant amounts of our Class A common stock, which would be dilutive to existing stockholders. In addition, if we do not have sufficient cash to repurchase the Notes following a fundamental change, we would be in default under the terms of the Notes, which could seriously harm our business. The terms of the Notes do not limit the amount of future indebtedness we may incur and if we incur significantly more debt, this could intensify the risks described above.

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The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.
In the event the conditional conversion feature of the Notes is triggered, holders of notes will be entitled to convert the notes at any time during specified periods at their option. If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
Note hedge and warrant transactions we have entered into may affect the value of the Notes and our common stock.
Concurrently with the issuance of the Notes, we entered into note hedge transactions with certain financial institutions, which we refer to as the “option counterparties.” The note hedge transactions are expected to reduce the potential dilution upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be. We also entered into warrant transactions with the option counterparties. However, the warrant transactions could separately have a dilutive effect to the extent that the market price per share of our common stock exceeds $381.82.
In connection with establishing their initial hedge of the note hedge and warrant transactions, the option counterparties or their respective affiliates have purchased shares of our common stock and/or entered into various derivative transactions with respect to our common stock following the pricing of the Notes. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives contracts with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the Notes (and are likely to do so during any observation period related to a conversion of Notes or following any repurchase of Notes by us on any fundamental change repurchase date or otherwise). This activity could cause or avoid an increase or a decrease in the market price of our common stock or the Notes.
In addition, if any such convertible note hedge and warrant transactions fail to become effective, the option counterparties or their respective affiliates may unwind their hedge positions with respect to our common stock, which could adversely affect the value of our common stock and the value of the Notes.
We are subject to counterparty risk with respect to the note hedge transactions.
The option counterparties are financial institutions or affiliates of financial institutions, and we will be subject to the risk that these option counterparties may default under the note hedge transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral. If one or more of the option counterparties to one or more of our note hedge transactions becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at the time under those transactions. Our exposure will depend on many factors but, generally, the increase in our exposure will be correlated to the increase in the market price of our common stock and in the volatility of the market price of our common stock. In addition, upon a default by one of the option counterparties, we may suffer adverse tax consequences and dilution with respect to our common stock. We can provide no assurances as to the financial stability or viability of any of the option counterparties.

Item 1B.
Unresolved Staff Comments
None.
 
Item 2.
Properties

Our headquarters is located in Mountain View, California, where we lease approximately 373,000 square feet of office space under a lease that expires in 2023. We also lease office space of approximately 2,982,000 square feet in locations throughout the United States and approximately 893,000 square feet internationally, some of which is currently under construction. We own land in Mountain View, CA, Sunnyvale, CA, and Dublin, Ireland, where we are building or are planning to build additional office space to accommodate anticipated future growth. In

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addition, we operate data centers in the United States and Singapore pursuant to various lease and co-location agreements.
We believe that our current facilities, both owned and leased, are adequate to meet our current needs. We intend to expand our facilities or add new facilities as we add employees and enter new geographic markets, and we believe that suitable additional or alternative space will be available as needed to accommodate ongoing operations and any such growth.

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Item 3.
Legal Proceedings

We are subject to legal proceedings and litigation arising in the ordinary course of business, including, but not limited to, certain pending patent and privacy matters, including class action lawsuits, as well as inquiries, investigations, audits and other regulatory proceedings. Although occasional adverse decisions or settlements may occur, we do not believe that the final disposition of any of these matters will have a material adverse effect on our business. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages, and include claims for injunctive relief. Additionally, our litigation costs can be significant. Other regulatory matters could result in fines and penalties being assessed against us, and we may become subject to mandatory periodic audits, which would likely increase our regulatory compliance costs. Adverse results of litigation or regulatory matters could also result in us being required to change our business practices, which could negatively impact our membership and revenue growth.
We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Periodically, we evaluate developments in our legal matters that could affect the amounts that have been previously accrued, if any, and make adjustments as appropriate. Significant judgment is required to determine both likelihood of there being, and the estimated amount of, a loss related to such matters, and our judgment may be incorrect. The outcome of any proceeding is not determinable in advance. Until the final resolution of any such matters that we may be required to accrue for, we may be exposed to loss in excess of the amount accrued, and such amounts could be material.

Item 4.
Mine Safety Disclosures
Not applicable.

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PART II

Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our Class A common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “LNKD.” There is no public trading market for our Class B common stock. The following table sets forth the high and low sales price per share of our Class A common stock as reported on the NYSE for the periods indicated:
 
 
2015
 
2014
 
High
 
Low
 
High
 
Low
First Quarter
$
276.18

 
$
209.60

 
$
234.48

 
$
178.25

Second Quarter
266.53

 
191.00

 
190.00

 
136.02

Third Quarter
233.18

 
165.57

 
232.28

 
153.31

Fourth Quarter
258.39

 
183.34

 
243.25

 
187.61

On December 31, 2015, the last reported stock price of our Class A common stock on the NYSE was $225.08. As of December 31, 2015, we had 339 holders of record of our Class A common stock and 15 holders of record of our Class B common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
We have never declared or paid, and do not anticipate declaring or paying, any cash dividends on our capital stock. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.

Performance Graph
This performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of LinkedIn Corporation under the Securities Act of 1933, as amended, or the Exchange Act.
The following graph shows a comparison from May 19, 2011 (the date our common stock commenced trading on the NYSE), through December 31, 2015, of the cumulative total returns for our Class A common stock, the NASDAQ Composite Index and the RDG Internet Composite Index. Such returns are based on historical results and are not intended to suggest future performance. Data for the NASDAQ Composite Index and the RDG Internet Composite Index assume reinvestment of dividends.


-38-

COMPARISON OF 56 MONTH CUMULATIVE TOTAL RETURN
Among LinkedIn Corporation, the NASDAQ Composite Index, and the RDG Internet Composite Index
 
Period Ending
Index
5/19/2011
 
6/30/2011
 
9/30/2011
 
12/31/2011
 
3/31/2012
 
6/30/2012
 
9/30/2012
 
12/31/2012
 
3/28/2013
 
6/28/2013
 
9/30/2013
 
12/31/2013
LinkedIn Corporation
100.00

 
95.59

 
82.84

 
66.85

 
108.21

 
112.75

 
127.75

 
121.82

 
186.80

 
189.18

 
261.07

 
230.06

NASDAQ Composite Index
100.00

 
96.74

 
84.67

 
92.45

 
109.39

 
104.19

 
111.16

 
107.94

 
117.70

 
123.27

 
137.75

 
152.95

RDG Internet Composite Index
100.00

 
96.25

 
92.28

 
99.15

 
125.24

 
117.63

 
129.81

 
119.54

 
120.80

 
125.35

 
141.71

 
162.77

 
Period Ending
Index
3/28/2014
 
6/30/2014
 
9/30/2014
 
12/31/2014
 
3/31/2015
 
6/30/2015
 
9/30/2015
 
12/31/2015
LinkedIn Corporation
$
196.22

 
181.93

 
220.47

 
243.72

 
265.10

 
219.24

 
$
201.73

 
$
238.81

NASDAQ Composite Index
$
155.35

 
162.95

 
166.23

 
175.13

 
179.84

 
183.58

 
$
169.82

 
$
184.45

RDG Internet Composite Index
$
172.72

 
178.05

 
183.89

 
176.78

 
188.54

 
195.08

 
$
200.98

 
$
242.78



Item 6.
Selected Financial Data
The following selected historical consolidated financial data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements, and the related notes under Item 8 “Financial Statements and Supplementary Data” of this

-39-

Annual Report on Form 10-K to fully understand factors that may affect the comparability of the information presented below.
The consolidated statements of operations data for the years ended December 31, 2015, 2014, 2013, 2012, and 2011 and the consolidated balance sheet data as of December 31, 2015, 2014, 2013, 2012, and 2011 are derived from our audited consolidated financial statements appearing under Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. The consolidated statement of operations data for the year ended December 31, 2012 and 2011 and the consolidated balance sheet data as of December 31, 2012 and 2011 are derived from audited consolidated financial statements not included in this report. Our historical results are not necessarily indicative of future results.
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
 
2012
 
2011
 
(in thousands, except per share data)
Consolidated Statements of Operations Data:
 
 
 
 
 
 
 
 
 
Net revenue
$
2,990,911

 
$
2,218,767

 
$
1,528,545

 
$
972,309

 
$
522,189

Costs and expenses:
 
 
 
 
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization shown separately below)
418,858

 
293,797

 
202,908

 
125,521

 
81,448

Sales and marketing
1,048,129

 
774,411

 
522,100

 
324,896

 
164,703

Product development
775,660

 
536,184

 
395,643

 
257,179

 
132,222

General and administrative
478,734

 
341,294

 
225,566

 
128,002

 
74,871

Depreciation and amortization
420,472

 
236,946

 
134,516

 
79,849

 
43,100

Total costs and expenses
3,141,853

 
2,182,632

 
1,480,733

 
915,447

 
496,344

Income (loss) from operations
(150,942
)
 
36,135

 
47,812

 
56,862

 
25,845

Other income (expense), net:
 
 
 
 
 
 
 
 
 
Interest income
10,571

 
4,971

 
2,895

 
1,025

 
169

Interest expense
(50,882
)
 
(6,797
)
 
—

 
—

 
—

Other, net
(23,477
)
 
(3,104
)
 
(1,479
)
 
(773
)
 
(3,072
)
Other income (expense), net
(63,788
)
 
(4,930
)
 
1,416

 
252

 
(2,903
)
Income (loss) before income taxes
(214,730
)
 
31,205

 
49,228

 
57,114

 
22,942

Provision (benefit) for income taxes
(49,969
)
 
46,525

 
22,459

 
35,504

 
11,030

Net income (loss)
(164,761
)
 
(15,320
)
 
26,769

 
21,610

 
11,912

Accretion of redeemable noncontrolling interest
(1,383
)
 
(427
)
 
—

 
—

 
—

Net income (loss) attributable to common stockholders
$
(166,144
)
 
$
(15,747
)
 
$
26,769

 
$
21,610

 
$
11,912

Net income (loss) per share attributable to common stockholders:
 
 
 
 
 
 
 
 
 
Basic
$
(1.29
)
 
$
(0.13
)
 
$
0.24

 
$
0.21

 
$
0.15

Diluted
$
(1.29
)
 
$
(0.13
)
 
$
0.23

 
$
0.19

 
$
0.11

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
 
 
 
 
 
 
 
 
 
Basic
129,024

 
122,800

 
113,643

 
105,166

 
77,185

Diluted
129,024

 
122,800

 
118,944

 
112,844

 
104,118

Other Financial and Operational Data:
 
 
 
 
 
 
 
 
 
Adjusted EBITDA (1)
$
779,804

 
$
592,214

 
$
376,243

 
$
223,030

 
$
98,713

Number of registered members (at period end)
413,671

 
346,731

 
276,842

 
201,912

 
144,974


-40-

 
(1)
We define adjusted EBITDA as net income (loss), plus: provision for income taxes; other (income) expense, net; depreciation and amortization; and stock-based compensation. See “Adjusted EBITDA” below for more information and for a reconciliation of adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with Generally Accepted Accounting Principles in the United States ("US GAAP").
Stock-based compensation included in the consolidated statements of operations data above was as follows:
 
 
Year Ended December 31,
  
2015
 
2014
 
2013
 
2012
 
2011
 
(in thousands)
Cost of revenue
$
48,577

 
$
28,617

 
$
15,600

 
$
6,416

 
$
1,678

Sales and marketing
96,076

 
60,166

 
36,187

 
17,726

 
8,074

Product development
233,006

 
154,856

 
98,861

 
46,026

 
13,625

General and administrative
132,615

 
75,494

 
43,267

 
16,151

 
6,391

Total stock-based compensation
$
510,274

 
$
319,133

 
$
193,915

 
$
86,319

 
$
29,768

 
 
As of December 31,
 
2015
 
2014
 
2013
 
2012
 
2011
 
(in thousands)
Consolidated Balance Sheet Data:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
546,237

 
$
460,887

 
$
803,089

 
$
270,408

 
$
339,048

Marketable securities
2,573,145

 
2,982,422

 
1,526,212

 
479,141

 
238,456

Property and equipment, net
1,047,005

 
740,909

 
361,741

 
186,677

 
114,850

Working capital
2,747,005

 
3,239,315

 
2,113,479

 
603,418

 
499,268

Total assets
7,011,199

 
5,427,257

 
3,352,793

 
1,382,330

 
873,697

Convertible senior notes, net
1,126,534

 
1,081,553

 
—

 
—

 
—

Redeemable noncontrolling interest
26,810

 
5,427

 
5,000

 
—

 
—

Total stockholders’ equity
4,468,643

 
3,325,392

 
2,629,394

 
908,424

 
624,979

Adjusted EBITDA
To provide investors with additional information regarding our financial results, we disclose adjusted EBITDA, a non-GAAP financial measure, in the table below and within this Annual Report on Form 10-K. We define adjusted EBITDA as net income (loss), plus: provision for income taxes; other (income) expense, net; depreciation and amortization; and stock-based compensation.
We include adjusted EBITDA in this Annual Report on Form 10-K because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Additionally, adjusted EBITDA is a key financial measure used by the compensation committee of our board of directors in connection with the payment of bonuses to our executive officers and employees. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under US GAAP. Some of these limitations are:
•
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•
adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

-41-

•
adjusted EBITDA does not consider the potentially dilutive impact of stock-based compensation;
•
adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and
•
other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other US GAAP results. The following table presents a reconciliation of adjusted EBITDA for each of the periods indicated: 
 
Year Ended December 31,
 
2015
 
2014
 
2013
 
2012
 
2011
 
(in thousands)
Reconciliation of Adjusted EBITDA:
 
 
 
 
 
 
 
 
 
Net income (loss)
$
(164,761
)
 
$
(15,320
)
 
$
26,769

 
$
21,610

 
$
11,912

Provision (benefit) for income taxes
(49,969
)
 
46,525

 
22,459

 
35,504

 
11,030

Other (income) expense, net
63,788

 
4,930

 
(1,416
)
 
(252
)
 
2,903

Depreciation and amortization
420,472

 
236,946

 
134,516

 
79,849

 
43,100

Stock-based compensation
510,274

 
319,133

 
193,915

 
86,319

 
29,768

Adjusted EBITDA
$
779,804

 
$
592,214

 
$
376,243

 
$
223,030

 
$
98,713


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Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
This section and other parts of this Annual Report on Form 10-K contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can also be identified by words such as “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in the subsection entitled “Risk Factors” above, which are incorporated herein by reference.
You should read the following discussion in conjunction with the consolidated financial statements and notes thereto included under Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. All information presented herein is based on the Company’s fiscal calendar. Unless otherwise stated, references in this report to particular years or quarters refer to the Company’s fiscal years ended December 31 of the applicable year and the associated quarters of those fiscal years. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Overview

As the world's largest professional network on the Internet, we currently have over 400 million members in over 200 countries and territories. LinkedIn's value proposition for our members and customers is simple: connect to opportunity. Members use our platform to stay connected and informed, advance their career, and work smarter. Ultimately, our vision is to create economic opportunity for every member of the global workforce by building the world's first economic graph, a digital representation of the global economy.
    
Our focus is on delivering value to members in their professional lives. We believe creating value for members strengthens the network effect of our platform and enables us to deliver products that create value to our customers. In 2015, we made progress against several long-term initiatives that deliver value to our members, specifically: geographic expansion, particularly in China; launching our re-imagined flagship mobile app; improving the overall job seeking experience, including scaling the total number of jobs on our platform; and focusing on our content strategy.

Also, in 2015, we acquired lynda.com, Inc. ("Lynda.com"), a privately-held online learning company that offers an extensive, high quality library of professional training videos and courses. We believe that the acquisition of Lynda.com further expands our content strategy, broadens our Talent Solutions product portfolio, and helps us realize our vision of building the world's first economic graph. The total purchase price for all of the outstanding equity interests of Lynda.com was approximately $1.5 billion, subject to adjustment, in combination of approximately 52% cash and approximately 48% in our Class A common stock.
  
Our revenue comes from products that monetize the critical mass of our platform. We believe by creating value for our members we can transform the way our customers hire, market, sell, and learn on a global basis through our three product lines: Talent Solutions, Marketing Solutions, and Premium Subscriptions. Our Talent Solutions include Hiring and Learning & Development ("L&D"). Hiring provides products to recruiters that enable them to attract, recruit, and hire talent. L&D, from our acquisition of Lynda.com, provides subscriptions to enterprises and individuals to online education courses. Our Marketing Solutions enable enterprises and individuals to advertise to our member base through relevant content. Our Premium Subscriptions (inclusive of Sales Solutions) enable professionals to manage their professional identity, grow their network, and connect with talent, while Sales Navigator, our premium social selling solution, enables sales professionals to find leads and generate sales.

While we experienced significant revenue growth in 2015 compared to 2014, we had significant operating losses as a result of our long-term investment strategy. In 2015, our net revenue was $2,990.9 million, which represents an increase of 35% from 2014. Our net revenue benefited from increased sales of our core products, specifically Recruiter, Jobs, Sponsored Content, and Sales Solutions as well as revenue from our recent acquisition of Lynda.com. In 2015, we had an operating loss of $214.7 million driven by increases in headcount-related expenses of $636.2 million as we hired additional employees to support the growth in our business. We also had an increase of $183.5 million in depreciation and amortization related to intangible assets from our acquisition of Lynda.com, build out of our data centers, leasehold improvements as we lease additional facilities to accommodate our headcount growth, and capitalized website and internal-use software.

-43-


We expect our growth rate to continue to decrease over time. As our net revenue increases, we expect that our growth rate related to net revenue will continue to decrease over time. Also, given the large scale and critical mass of our network, we believe member and engagement growth, as measured by our key metrics, will decelerate over time and that this may impact the growth of certain portions of our business. Our future growth will depend, in part, on our ability to continue to increase member growth and engagement by creating value for members as well as strengthening our core offerings on mobile and desktop devices and expanding our global presence, which we believe will result in increased sales of our Talent Solutions, Marketing Solutions, and Premium Subscriptions.

Our long-term financial focus is on sustainable, long-term growth; however, in the near term we expect US GAAP operating losses as we continue to make investments in our business. Our investments in 2016 will focus on the following themes: our core products within Talent Solutions, Marketing Solutions, and Premium Subscriptions, the marketplace dynamics between members and customers to create reciprocal value in our products, and intelligent growth by supporting our long-term financial objectives of sustainable revenue and earnings growth.
•
Our Products. With respect to product development, we will continue to focus investment on our member and customer value proposition: connect to opportunity.
◦
Members. We plan to continue to invest in our global member experience focusing on our value propositions: helping members stay connected and informed, advance their careers, and work smarter.
◦
Customers. We plan to invest in our core product development efforts to transform the way customers hire, market, sell, and learn.
In addition, we expect to continue to invest in mobile across our product lines. Mobile is the fastest growing channel for member engagement, growing at twice the rate of overall site traffic with mobile unique visiting members representing 54% of unique visiting members in 2015.
•
Our Talent. We expect to expand our workforce in 2016, however, such expansion, specifically related to our sales and product development teams, will be at a slower rate than in 2015. We expect that the increased headcount will result in an increase in related expenses, including stock-based compensation expense and capital expenditures related to facilities. As of December 31, 2015, we had 9,372 employees, which represented an increase of 36% compared to the prior year end. Excluding the employees from our acquisition of Lynda.com, we would have had 8,797 employees, which represents an increase of 28% compared to 2014.
•
Our Technology. We expect to continue to make significant capital expenditures to upgrade our technology and network infrastructure to improve the ability of our website to handle expected increases in usage, to enable the release of new features and solutions, and to scale for future growth. These investments are particularly focused on expanding our footprint of data centers.
As a result of our investment philosophy, we expect to be in an operating loss on a consolidated basis under generally accepted accounting principles in the United States of America ("US GAAP").

-44-

Key Metrics
We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make strategic decisions. In addition, we regularly review our key metrics to assess whether they are the best metrics available to us as the business environment we operate in changes. For example, as mobile traffic continues to represent a larger portion of member engagement on our site, the relevance of member page views as a metric decreases because a well-designed mobile application may reduce the number of clicks and pages a member touches. In the future, we may consider alternative metrics to member page views such as a metric that tracks the frequency of engagement a member has with our site.
•
Number of Registered Members. We define the number of registered members in our network as the number of individual users who have created a member profile on LinkedIn.com as of the date of measurement. We believe the number of registered members is an indicator of the growth of our network and our ability to receive the benefits of the network effects resulting from such growth. Growth in our member base depends, in part, on our ability to successfully develop and market our solutions to professionals who have not yet become members of our network. Member growth will also be contingent on our ability to translate our offerings into additional languages, create more localized products in certain key markets, and more broadly expand our member base internationally. We believe that a higher number of registered members will result in increased sales of our Talent Solutions, Marketing Solutions, and Premium Subscriptions, as customers will have access to a larger pool of professional talent. However, a higher number of registered members will not immediately increase sales, nor will a higher number of registered members in a given region immediately increase sales in that region, as growth of sales and marketing activities generally takes more time to develop than membership growth.
The following table presents the number of registered members as of the periods presented by geographic region:
 
December 31,
 
 
 
December 31,
 
 
 
2015
 
2014
 
% Change
 
2014
 
2013
 
% Change
 
(in thousands)
 
 
 
(in thousands)
 
 
Members by geographic region:
 
 
 
 
 
 
 
 
 
 
 
United States
125,142

 
111,422

 
12
%
 
111,422

 
94,115

 
18
%
Other Americas (1)
70,020

 
59,658

 
17
%
 
59,658

 
47,646

 
25
%
Total Americas
195,162

 
171,080

 
14
%
 
171,080

 
141,761

 
21
%
EMEA (2)
132,634

 
110,654

 
20
%
 
110,654

 
85,656

 
29
%
APAC (3)
85,875

 
64,997

 
32
%
 
64,997

 
49,425

 
32
%
Total number of registered members (4)
413,671

 
346,731

 
19
%
 
346,731

 
276,842

 
25
%
 ______________________
(1)
Canada, Latin America and South America
(2)
Europe, the Middle East and Africa (“EMEA”)
(3)
Asia-Pacific (“APAC”)
(4)
The number of registered members is higher than the number of actual members due to various factors. For more information, see “Risk Factors—The number of our registered members is higher than the number of actual members and a substantial majority of our traffic is generated by a minority of our members. Our business may be adversely impacted if we are unable to attract and retain additional members who actively use our services.”
The number of our registered members increased by 19% in 2015 compared to 2014, and by 25% in 2014 compared to 2013. Over these same periods, the growth rate in our net revenue exceeded the growth rate of our number of registered members. While growth in the number of registered members can be an indicator of expected revenue growth, it also informs our management’s decisions with respect to those areas of our business that will require further investment to support expected future membership growth. For example, as the number of registered members increases, we may need to increase our capital expenditures to improve our information technology infrastructure to maintain the effectiveness of our solutions and the performance of our website and mobile applications for our members.

-45-

•
Unique Visiting Members. We define unique visiting members as the total number of members who have visited LinkedIn.com on desktop or have visited selected mobile applications offered by LinkedIn.com on their mobile devices at least once during a month. We view unique visiting members as a key indicator of whether we are delivering value to members by continuing to improve our product offerings as well as growth in our brand awareness among members. Higher levels of member traffic contribute to building a larger pool of professional talent and a richer data ecosystem, which is our key monetizable asset. We leverage these assets, both directly and indirectly, to grow sales within Talent Solutions, Marketing Solutions, and Premium Subscriptions. Continued growth in unique visiting members will be driven by growth in the number of registered members, improvements to features and products that drive traffic to our website and mobile applications, and global expansion. This growth may be impacted by business decisions aligned with our long-term strategy in order to create a better member experience. For example, our decision to reduce the number of emails sent to members may adversely impact the amount of member traffic to our site.

The following table presents the average monthly number of unique visiting members during the periods presented:
 
Year Ended December 31,
 
 
 
Year Ended December 31,
 
 
 
2015
 
2014
 
% Change
 
2014
 
2013
 
% Change
 
(in thousands)
 
 
 
(in thousands)
 
 
Unique visiting members (1), (3)
98,452

 
87,222

 
13
%
 
87,222

 
73,147

 
19
%
Mobile unique visiting
members (2), (3)
52,770

 
40,050

 
32
%
 
40,050

 
26,521

 
51
%
 ______________________
(1)
Members who have visited LinkedIn.com on their desktops and/or have visited selected mobile applications offered by LinkedIn.com on their mobile devices.
(2)
Members who have visited selected mobile applications offered by LinkedIn.com on their mobile devices.
(3)
We track unique visiting members using internal tools, which are subject to various risks. For more information, see “Risk Factors—The tracking of certain of our performance metrics is done with internal tools and is not independently verified. Certain of our performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.”
•
Member Page Views. We define page views as the total number of page views our members view during the measurement period on LinkedIn.com for desktop and on selected mobile applications offered by LinkedIn.com for mobile devices. Similar to unique visiting members, we believe member page views is an indicator for gaining insight into whether our members are deriving increased value from our solutions. However, as overall site traffic is increasingly coming from mobile, we expect this metric to become less meaningful over time, as a well-designed mobile application reduces the number of clicks and pages a user touches in order to create a high quality mobile experience. For example, member page views may be adversely impacted by our new mobile flagship app which streamlines the product by decreasing the number of page views necessary to navigate the app. Specifically, more intuitive tabbed browsing replaces a dedicated navigation page, which creates more seamless interaction. Additionally, member page views may not capture all of the value that our members and other users derive from our solutions because part of the benefit of certain products and features is that the member does not need to visit our website to receive value from our platform. For example, members can respond to InMails they receive from other members without accessing their LinkedIn account or our website.


-46-

The following table presents the number of member page views during the periods presented:
 
Year Ended December 31,
 
 
 
Year Ended December 31,
 
 
 
2015
 
2014
 
% Change
 
2014
 
2013
 
% Change
 
(in millions)
 
 
 
(in millions)
 
 
Member page views (1), (2)
143,464

 
109,110

 
31
%
 
109,110

 
82,990

 
31
%
 ______________________
(1)
These metrics include member page views on LinkedIn.com for desktop and selected mobile applications offered by LinkedIn.com for mobile devices.
(2)
We track page views using internal tools, which are subject to various risks. For more information, see “Risk Factors—The tracking of certain of our performance metrics is done with internal tools and is not independently verified. Certain of our performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.”
•
Number of LinkedIn Corporate Solutions Customers. We define the number of LinkedIn Corporate Solutions ("LCS") customers as the number of enterprises and professional organizations that we have under active contracts for our LCS products as of the date of measurement. Our LCS products include LinkedIn Recruiter, Job Slots, Recruitment Media, and Career Pages, which are all part of Hiring within Talent Solutions. LCS products do not include LinkedIn Jobs Postings, Job Seeker subscriptions, or Recruiter Lite subscriptions. The number of LCS customers can be an indicator of our market penetration in the online recruiting market and the value that our products bring to both large and small enterprises and professional organizations. However, we do not use this metric to manage our business and we believe the usefulness of this metric is limited. For example, the amount of revenue attributable to a particular customer can vary significantly, and therefore one large customer can be much more significant than a large number of smaller customers. In addition, we recognize LCS product revenue ratably over the terms of the respective agreements, which are typically 12 months. As a result, a significant amount of the LCS product revenue is derived from the recognition of deferred revenue relating to contracts entered into during previous quarters. Consequently, new customers in any single quarter will likely have a minor impact on our revenue for that quarter. In addition, there has recently been a conscious business effort to direct certain field sales customers to self-serve products, which is expected to be favorable to our business, but would be negatively reflected in our LCS customer count as self-serve customers are not included in this metric. We believe the number of LCS customers was more meaningful when we were a less mature company with a smaller overall customer base. For the above reasons, we do not intend on providing this metric in the future and will continue to consider disclosing other metrics that may promote a material understanding of our business.
The following table presents the number of LCS customers as of the periods presented:
 
December 31,
 
 
 
December 31,
 
 
 
2015
 
2014
 
% Change
 
2014
 
2013
 
% Change
LCS customers
42,987

 
33,271

 
29
%
 
33,271

 
24,444

 
36
%

•
Sales Channel Mix. We sell our Talent Solutions, Marketing Solutions, and Sales Solutions (included in Premium Subscriptions) offline through our field organization or online on our website. Since the launch of the new Sales Navigator and increasing investment in the Sales Solutions field sales team, we expect that the portion of Premium Subscriptions revenue from our field sales channel will continue to increase over time.
Our field sales organization uses a direct sales force to solicit customers and agencies. This offline channel is characterized by a longer sales cycle where price can be negotiated, higher relative average selling prices, longer contract terms, higher selling expenses, and a longer cash collection cycle compared to our online channel.
Our online, or self-service, sales channel allows members to purchase solutions directly on our website. Members can purchase Premium Subscriptions as well as certain lower priced products in our Talent Solutions and Marketing Solutions, such as Job Seeker subscriptions, Job Postings, Recruiter Lite, and self-service advertising. This channel is characterized by lower average selling prices, availability of monthly contractual terms, lower selling costs, and a highly liquid collection cycle.

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The following table presents our net revenue by field sales and online sales:
 
Year Ended December 31,
 
2015
 
2014
 
2013
 
($ in thousands)
Field sales
$
1,864,553

 
62
%
 
$
1,349,804

 
61
%
 
$
891,458

 
58
%
Online sales
1,126,358

 
38
%
 
868,963

 
39
%
 
637,087

 
42
%
Net revenue
$
2,990,911

 
100
%
 
$
2,218,767

 
100
%
 
$
1,528,545

 
100
%

Adjusted EBITDA

To provide investors with additional information regarding our financial results, we disclose adjusted EBITDA, a non-GAAP financial measure, within this Annual Report on Form 10-K. We define adjusted EBITDA as net income (loss), plus: provision for income taxes; other (income) expense, net; depreciation and amortization; and stock-based compensation. The following table presents a reconciliation of adjusted EBITDA to net income (loss), the most directly comparable US GAAP financial measure.
We include adjusted EBITDA in this Annual Report on Form 10-K because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Additionally, adjusted EBITDA is a key financial measure used by the compensation committee of our board of directors in connection with the payment of bonuses to our executive officers and employees. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
For additional information on the limitations of adjusted EBITDA, see “Adjusted EBITDA” in Item 6 “Selected Financial Data” for more information. 
 
Year Ended December 31,
 
2015
 
2014
 
2013
 
(in thousands)
Reconciliation of Adjusted EBITDA:
 
 
 
 
 
Net income (loss)
$
(164,761
)
 
$
(15,320
)
 
$
26,769

Provision (benefit) for income taxes
(49,969
)
 
46,525

 
22,459

Other (income) expense, net
63,788

 
4,930

 
(1,416
)
Depreciation and amortization
420,472

 
236,946

 
134,516

Stock-based compensation
510,274

 
319,133

 
193,915

Adjusted EBITDA
$
779,804

 
$
592,214

 
$
376,243


Results of Operations
The following table sets forth our results of operations for the periods presented as a percentage of net revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
 

-48-

 
Year Ended December 31,
 
2015
 
2014
 
2013
 
(as a percentage of net revenue)
Consolidated Statements of Operations Data: (1)
 
 
 
 
 
Net revenue
100
 %
 
100
 %
 
100
 %
Costs and expenses:
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization shown separately below)
14

 
13

 
13

Sales and marketing
35

 
35

 
34

Product development
26

 
24

 
26

General and administrative
16

 
15

 
15

Depreciation and amortization
14

 
11

 
9

Total costs and expenses
105

 
98

 
97

Income (loss) from operations
(5
)
 
2

 
3

Other income (expense), net:
 
 
 
 
 
Interest income
—

 
—

 
—

Interest expense
(2
)
 
—

 
—

Other, net
(1
)
 
—

 
—

Other income (expense), net
(2
)
 
—

 
—

Income (loss) before income taxes
(7
)
 
1

 
3

Provision (benefit) for income taxes
(2
)
 
2

 
1

Net income (loss)
(6
)
 
(1
)
 
2

Accretion of redeemable noncontrolling interest
—

 
—

 
—

Net income (loss) attributable to common stockholders
(6
)%
 
(1
)%
 
2
 %
  ______________________
(1) Certain items may not total due to rounding.
Net Revenue
We generate revenue from Talent Solutions, Marketing Solutions, and Premium Subscriptions.
Talent Solutions. Talent Solutions revenue is comprised of Hiring and Learning & Development products. Hiring products primarily consist of LinkedIn Recruiter, Job Slots, Career Pages, Job Postings, Job Seeker subscriptions and Recruiter Lite subscriptions. The Company provides access to its professional database of both active and passive job candidates with LinkedIn Recruiter, which allows corporate recruiting teams to identify candidates based on industry, job function, geography, experience/education, and other specifications. Revenue from the LinkedIn Recruiter product is recognized ratably over the subscription period, which consists primarily of annual subscriptions that are billed monthly, quarterly, or annually. The Company also earns revenue from Job Slots, which enable an enterprise or professional organization to post jobs on its website, and allows the job that is posted to be changed, updated or modified over the life of the contract. Revenue from Job Slots is recognized ratably over the contract, typically 12 months. Career Pages give enterprises and professional organizations the ability to customize the career section of their Company Profiles and content on Career Pages to allow potential candidates to learn more about what it is like to work at their company. Revenue from Career Pages is recognized ratably over the contractual period, which is typically 12 months. The Company also earns revenue from the placement of Job Postings on its website, which generally run for 30 days. Independent recruiters can pay to post job openings that are accessible through job searches or targeted job matches. Revenue from Job Postings is recognized as the posting is displayed or at the expiration of the contract period, if not utilized. Job Seeker subscriptions give access to premium features on our website to help them find job opportunities. Revenue from Job Seeker and Recruiter Lite subscriptions is also recognized ratably over the contractual period, which consists of monthly and annual subscriptions. Learning & Development products consist of individual and enterprise subscriptions to the Lynda.com learning platform. Revenue from these subscriptions is recognized ratably over the subscription period, which consists of monthly and annual subscriptions for individuals and annual and multi-year subscriptions for enterprises.

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Marketing Solutions. Marketing Solutions revenue is earned from advertisements (consisting of content-based, graphic display, and text link) shown primarily on LinkedIn.com and its mobile applications based on either a cost per click or cost per advertisement model. Revenue from Internet advertising is generally recognized on a gross basis, with the exception of transactions with advertising agencies, which are recognized net of agency discounts.
Premium Subscriptions. Premium Subscriptions revenue is derived primarily from selling various subscriptions that allow members to have further access to premium services on LinkedIn.com. The Company offers its members monthly or annual subscriptions. Revenue from Premium Subscription services is recognized ratably over the contractual period, which is generally from one to 12 months. Premium Subscriptions also includes revenue from its Sales Solutions products, which includes annual subscription solutions sold through its field sales and online channels. Revenue from Sales Solution subscriptions is also recognized ratably over the contractual period, which is generally from one to 12 months.
 
Year Ended
December 31,
 
 
 
Year Ended
December 31,
 
 
 
2015
 
2014
 
% Change
 
2014
 
2013
 
% Change
 
($ in thousands)
 
 
 
($ in thousands)
 
 
Net revenue by product:
 
 
 
 
 
 
 
 
 
 
 
Talent Solutions
 
 
 
 
 
 
 
 
 
 
 
          Hiring
$
1,769,771

 
$
1,327,737

 
33
%
 
$
1,327,737

 
$
910,257

 
46
%
          Learning & Development
107,424

 
—

 
n/a

 
—

 
—

 
n/a

     Total Talent Solutions
1,877,195

 
1,327,737

 
41
%
 
1,327,737

 
910,257

 
46
%
Marketing Solutions
581,328

 
454,500

 
28
%
 
454,500

 
311,777

 
46
%
Premium Subscriptions
532,388

 
436,530

 
22
%
 
436,530

 
306,511

 
42
%
Total
$
2,990,911

 
$
2,218,767

 
35
%
 
$
2,218,767

 
$
1,528,545

 
45
%
Percentage of net revenue by product: (1)
 
 
 
 
 
 
 
 
 
 
 
Talent Solutions
 
 
 
 
 
 
 
 
 
 
 
          Hiring
59
%
 
60
%
 
 
 
60
%
 
60
%
 
 
          Learning & Development
4
%
 
—
%
 
 
 
—
%
 
—
%
 
 
     Total Talent Solutions
63
%
 
60
%
 
 
 
60
%
 
60
%
 
 
Marketing Solutions
19
%
 
20
%
 
 
 
20
%
 
20
%
 
 
Premium Subscriptions
18
%
 
20
%
 
 
 
20
%
 
20
%
 
 
Total
100
%
 
100
%
 
 
 
100
%
 
100
%
 
 
  ______________________
(1) Certain items may not total due to rounding.
2015 Compared to 2014
Total net revenue increased $772.1 million in 2015 compared to 2014.
Net revenue from our Talent Solutions increased $549.5 million, which is comprised of increases in Hiring of $442.0 million and Learning & Development of $107.4 million. The increase in Hiring revenue was driven by increased spending by existing customers as well as additional business from new customers, compared to the prior year. Learning & Development consists of revenue from our recent acquisition of Lynda.com.
Net revenue from our Marketing Solutions increased $126.8 million primarily due to Sponsored Content from our field sales and self-service channels, and to a lesser extent, revenue from products related to our acquisition of Bizo, Inc. ("Bizo"), partially offset by weakness in demand for our display advertising products. Sponsored Content represented 48% of Marketing Solutions revenue in 2015, and we expect it to represent a larger percentage of Marketing Solutions revenue as we continue to shift to content marketing and experience less demand for display advertising products. In addition, in 2016, Bizo-related product revenue will decline as we discontinue the standalone products and work to migrate the functionality from the Bizo-related products into our Sponsored Content platform, making the technology accessible to any Marketing Solutions customer.
Net revenue from our Premium Subscriptions increased $95.9 million primarily due to the increase in revenue from our Sales Solutions products, which include Sales Navigator. Our Sales Solutions products continue to grow at

-50-

a higher rate than our other Premium Subscription products as well as continue to represent a larger percentage of total Premium Subscriptions revenue. Sales Navigator represented 35% of Premium Subscriptions revenue in 2015.
2014 Compared to 2013
Total net revenue increased $690.2 million in 2014 compared to 2013.
Net revenue from our Talent Solutions increased $417.5 million as a result of increased spending by existing customers as well as generating business from new customers, as evidenced by the 36% increase in the number of LCS customers as of December 31, 2014 compared to 2013.
Net revenue from our Marketing Solutions increased $142.7 million primarily due to the increase in revenue of $113.3 million from the introduction of Sponsored Updates in our field sales and self-service channels, which was launched in the third quarter of 2013, and to a lesser extent, revenue of $22.9 million from our acquisition of Bizo.
Net revenue from our Premium Subscriptions increased $130.0 million primarily due to the increase in revenue of $59.4 million from our Sales Solutions products, which include Sales Navigator. Sales Navigator represented approximately one-quarter of Premium Subscriptions revenue in 2014. In addition, the increase is a result of an increase in the number of premium subscribers due to a higher number of members and member engagement. Specifically, the number of registered members is a meaningful metric in evaluating and understanding net revenue from our Premium Subscriptions because an increase in the number of registered members has historically led to a proportionate increase in the number of premium subscribers.
The following table presents our net revenue by geographic region:
 
Year Ended
December 31,
 
 
 
Year Ended
December 31,
 
 
 
2015
 
2014
 
% Change
 
2014
 
2013
 
% Change
 
($ in thousands)
 
 
 
($ in thousands)
 
 
Net revenue by geographic region:
 
 
 
 
 
 
 
 
 
 
 
United States
$
1,845,808

 
$
1,333,978

 
38
%
 
$
1,333,978

 
$
942,122

 
42
%
Other Americas (1)
167,975

 
143,207

 
17
%
 
143,207

 
109,672

 
31
%
Total Americas
2,013,783

 
1,477,185

 
36
%
 
1,477,185

 
1,051,794

 
40
%
EMEA (2)
730,244

 
554,567

 
32
%
 
554,567

 
358,244

 
55
%
APAC (3)
246,884

 
187,015

 
32
%
 
187,015

 
118,507

 
58
%
Total
$
2,990,911

 
$
2,218,767

 
35
%
 
$
2,218,767

 
$
1,528,545

 
45
%
 ______________________
(1)
Canada, Latin America and South America
(2)
Europe, the Middle East and Africa (“EMEA”)
(3)
Asia-Pacific (“APAC”)

International revenue increased $260.3 million in 2015 compared to 2014, and $298.4 million in 2014 compared to 2013. International revenue represented 38%, 40%, and 38% of total revenue in 2015, 2014, and 2013, respectively. The increase in international revenue is due to the expansion of our sales, technical, and support operations in international locations and growth in our global member base due to developing our brand across various geographies, partially offset by foreign currency fluctuations. Within Marketing Solutions, the United States has experienced stronger growth than our international markets, primarily due to a higher adoption rate of Sponsored Content and less pronounced weakening of premium display advertising products domestically. We expect international revenue to increase on an absolute basis as we continue to expand our sales force in key international markets where member engagement supports business efforts at scale.


-51-

The following table presents our net revenue by geography, by product:
 
 
Year Ended
December 31,
 
 
 
Year Ended
December 31,
 
 
 
2015
 
2014
 
% Change
 
2014
 
2013
 
% Change
 
($ in thousands)
 
 
 
($ in thousands)
 
 
Net revenue by geography, by product:
 
 
 
 
 
 
 
 
 
 
 
United States
 
 
 
 
 
 
 
 
 
 
 
Talent Solutions
$
1,157,231

 
$
809,560

 
43
%
 
$
809,560

 
$
582,928

 
39
%
Marketing Solutions
377,490

 
272,179

 
39
%
 
272,179

 
179,983

 
51
%
Premium Subscriptions
311,087

 
252,239

 
23
%
 
252,239

 
179,211

 
41
%
Total United States revenue
$
1,845,808

 
$
1,333,978

 
38
%
 
$
1,333,978

 
$
942,122

 
42
%
International
 
 
 
 
 
 
 
 
 
 
 
Talent Solutions
$
719,964

 
$
518,177

 
39
%
 
$
518,177

 
$
327,329

 
58
%
Marketing Solutions
203,838

 
182,321

 
12
%
 
182,321

 
131,794

 
38
%
Premium Subscriptions
221,301

 
184,291

 
20
%
 
184,291

 
127,300