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Morgan Stanley Technology, Media, & Telecom Conference

March 3, 2014 5:30 PM ET

Executives

Jeff Weiner - Chief Executive Officer

Analysts

Scott Devitt - Morgan Stanley

Scott Devitt - Morgan Stanley

Okay we’re going to get started. Scott Devitt, Morgan Stanley’s consumer Internet analyst. It’s my pleasure to welcome Jeff Weiner, the CEO of LinkedIn. Jeff joined LinkedIn in 2008 and has extensive experience in the consumer Internet sector from his seven years at Yahoo!

Jeff also spent time as an executive in residence at Greylock and Accel Partners. He serves on the Board at Intuit and several nonprofits. Jeff’s going to go through a presentation and then we’re going to do some questions at the end. It's not often that you have a prepared presentation from a five-tool player like Jeff Weiner. So get ready. This should be interesting and I’m going to turn it over to Jeff.

Jeff Weiner

Five-tool player. Going back to the Influencer post from last year. Well played, Scott. So thank you for the introduction. Thank you all for joining us here today. As Scott mentioned a little unusual for us to be doing keynotes, we typically do firesides but we figured it’s been a little while so no time like the present.

So I’m going to walk through just briefly some of the results we’ve achieved to-date. I’m going to turn to the areas we’re going to be focused on in 2014 and I’m going to finish with a little picture painting of the future for LinkedIn and our platform.

So with that, let’s kick it off. Five years ago, we codified our mission statement to connect the world’s professionals, to make them more productive and successful and by far and away the most important word in this mission, professionals. It has always been our exclusive focus in the context within which we operate. It also defines our immediate addressable opportunity of the roughly 600 million knowledge workers in the world. And we’ve made good strides over the last five years in terms of realizing that mission statement, growing from 32 million cumulative members from the end of 2008 to nearly 10x that amount, 277 million members, the end of 2013.

We’ve seen even stronger growth with regard to our unique user base well in excess of that 10x figure and SlideShare certainly played a role in that, the acquisition that took place in 2011. Page views have grown more substantially than our total unique membership which has been a byproduct of increasingly investing in the means to engage our members.

We’ve also seen substantial increase in mobile composition of our traffic growing from less than 2% five years ago to north of 40% to end 2013. All totaled, the growth we’ve seen in our cumulative members, our uniques, our page views, and the transition to an increasingly mobile world has translated to significant top line growth roughly 20x from where we completed 2008. And similarly we've seen dramatic growth in terms of our bottomline well in excess of the growth rate for our revenue.

These results have been achieved in large part due to our continuing focus on placing our members first and our core value proposition of connecting talent with opportunity at massive scale. And when it comes to the manifestation of this value proposition with regard to our members, we’re really focused in three areas, professional identity, networks and knowledge and each of these has a specific strategic objective.

With regard to the professional identity, it’s to be the professional profile record. If our members are going to connect, find, or be found by the professionals, we like them to be able to leverage LinkedIn and our tools and assets to be able to do so.

With regard to networks, it’s connecting all of the world’s professionals, all 600 million knowledge workers and increasingly students or pre-professionals. And I’ll get to that in just a moment. And then lastly, with regard to the strategic objectives, it’s to be the definitive professional publishing platform. So I want to just take a little deeper dive in each one of these areas so you can see where we’re going to be focused in 2014.

With regard to be in the professional profile record, it really starts with the LinkedIn profile, which is increasingly replacing the resume in terms of how people represent their experiences, their skills and perhaps most importantly their ambitions. And along with this transition from resume to profile has come a major change in an important dynamic.

People are now updating their profile when they are not looking for work because it reflects who they are, their professional identity, putting their best professional foot forward and increasingly that’s how opportunities accrue to our members. And with that in mind, we want to create the richest set of capabilities with regard to this profile experience that we can.

Here you see the profile of a general contractor and increasingly we’re allowing folks like this to not just represent what they do in words, like the dream home that Steven’s built but in images as well, full rich media capability whether it would be pictures or videos, presentations, this all brings together a composite picture of these individuals.

And the vision here ultimately is that anytime, any of our members are uploading or sharing content that’s relevant to who they are as professionals at a click of a button, no matter where they are in the web, desktop, mobile they are going to able to add that to their LinkedIn profile. So that’s further out with regard to rich media but this notion of adding to your profile at a click of a button it already exists today.

And we’ve been working with some of the massively open online courses to enable our members like this member in Brazil to complete coursework, say for Python programming and then receive an e-mail from in this case, Coursera that enables the member to upload that certification to their LinkedIn profile at a click of a button in mere milliseconds.

And we are working with all of the major MOOCs in this case and ultimately we like to extend this capability to all companies that are offering this kind of certification for specific skills. And then of course, if you play out the ecosystem dynamic increasingly employers will have the opportunity to search for these specific kinds of certifications through our recruiter platform.

Turning now to networks and connecting all of the world’s professionals, we recently made an announcement just last week as a matter of fact that we’re going to be localizing LinkedIn into simplified Chinese. We’ve been able to operate in China now for a number of years. We’ve already reached 4 million members but we have really just scratched the surface of the second largest economy in the world.

Total addressable when including students, professionals and pre-professionals, there is a big student market there, roughly 140 million people in China, and we believe we’re in a position to create significant value for our Chinese members and members throughout the world as we connect them with this key contributor to the global economy.

Speaking of students, it continues to be one of our fastest growing demographics and actually represents an addressable opportunity even larger than that of China, roughly a 180 million by some measures. Last year, we rolled out University profile and in just about six, seven months, we’re already reaching 24,000 schools that now have a presence on LinkedIn and we continue to invest in specific tools that add value to students.

So at the top of this page, you can see the alumni integration where any student at any school can see all the people that have come before them on LinkedIn where they currently work, their geography, their functional area in the company and the path they follow is very valuable.

We also recently just added the ability to see notable alumni from your schools. So you can be inspired and ultimately see how you can reach out to these people for mentorship up to 3 degrees as I’m sure Cory and Reed and Tim will all appreciate, you are getting some of those pings.

Moving from networks to knowledge and emerging as a definitive professional publishing platform, several years ago when we first set about this objective frankly it was largely aspirational. We had to shift in the mindset of our members what LinkedIn’s core value was all about and while everyone intuitively understood the power of LinkedIn in terms of providing a mechanism to represent professional identity, this notion of LinkedIn as a powerful tool to express and exchange knowledge was still somewhat nascent.

Over the last several years by acquisitions and through organic means, we had a chance to continue to build out this capability, here you can see a number of examples, SlideShare, groups, our pulse news reader application and the Influencers program. And now today all totaled these assets are generating over 80 million unique users a month, which ranks us among the top business publishers on the Internet.

One of the reasons for that has been the success of our Influencers program, which has really changed the way in which people perceive the platform. This is where roughly 500 of the world's most influential professional luminaries are given the opportunity to share their expertise, their experience, their perspective in long form and to be followed by our members.

As a great example, Angela Ahrendts, the CEO of Burberry, who wrote exclusively on LinkedIn about the importance of getting your transition right, this was shortly after announcing to the world, she was going to be taking over the Apple retail position and she is going to be joining them this summer.

It may be a little hard to read, but you can see here a north of 160,000 views on this specific post, which is illustrative of the engagement that these professional luminaries have been seen, on average this post from our influencers have generated over 30,000 views.

With this success in mind, we want to figure out a way to retain the exclusivity of the influencer program while broadening the platform to all of our members and just a couple of weeks ago that’s exactly what we announced.

So now every member of LinkedIn, people like Alex, who several years ago was a professional business writer, covering green energy and he is now doing [BV] [ph] for a content management system. People like Alex can share their expertise in this particular instance. It was his perspective on Tesla’s gigafactory announcement and not only does this put his professional foot forward in the best of light, but once he clicks publish, it’s immediately integrated into his profile.

This is a really unique mechanism through which one’s professional knowledge and one’s professional identity increasingly become intertwined and it is a really valuable way for people like Alex to be able to go out there and generate even greater opportunity.

Turning now to the value that we are delivering for our customers and again it’s about connecting talent with opportunity at massive scale we manifest that with regard to our customers in three ways, transforming the way they hire, the way they market and the way they sell.

Again, three specific strategic objectives here with regard to hiring, it’s powering half of all the hires that our talent solutions customers are generating. With regard to our marketing solutions business we want to be the most effective way for marketers to engage with professionals. And with regard to our sales solutions portfolio of products we want to be there at the start of every sales opportunity.

So let’s dive a little deeper into where we are going to be focused in these three respective areas. With regard to talent solutions, we have emerged as the leading platform for passive candidate recruiting at scale, enabling recruiters and hiring managers to leverage our flagship recruiter application, desktop and mobile to search for any professional on the platform and find exactly the right candidate.

Increasingly, we want to invest not only in this flagship experience but also the volume of jobs available on LinkedIn and through our acquisition of Bright not just the volume of jobs but our ability to match the right job to the right member at the right time.

So in this particular instance, it’s not just going to be about members finding job, it is increasingly going to be about the right jobs finding our members and we are excited about that opportunity.

With regard to marketing solutions, last summer we announced for the first time ever that our customers, our marketing solution customers would be able to integrate content on a paid basis directly into the homepage and the stream on both desktop and mobile.

We have been very pleased with the early results here in terms of the number of customers. The quality of the content they are producing and perhaps most of all the levels of engagement that we are seeing, this is a actual example that just ran about a week ago.

And we have also been very pleased at the composition here between desktop and mobile and sponsored updates is now seeing roughly 70% of the revenue coming through our mobile channel, which is something that we were really happy about given how thoughtful we want to be with the limited real estate of the smartphones and the iPad.

With regard to sell solutions, this is a newer business for us. It’s still early days. We think we are very well-positioned to emerge as the leader or one of leaders in social selling. And for us we are going to be thinking about how we create value for our members in three specific ways, helping sales professional, business development professionals find the right prospects, connect with the right prospects and engage with that prospect.

So let me give you an example what that would look like on LinkedIn. And bear in mind a number of these tools already exist today. So you're a sales manager and you are selling an ERP solution, expensive, highly scalable into an enterprise, and you've got your list of potential prospects within a territory by company, you are trying to figure out how to find exactly the right person within that organization and by virtue of some of the proprietary tools you’ve got access to by being a sales solutions customer, you are going to see that Mary just became the CIO within your prospect company.

Now you need to figure out the best way to get in touch with Mary. Going to her profile, again, leveraging some these tools that are available today, you are going to be able to see all the people that you share in common, your mutual connection and in this particular instance it turns out that James works directly with you and he used to work with Mary. So you are going to ping James ask for the introduction and now you're able to convert what would have been a cold call into a warm prospect.

Lastly, by virtue of visiting Mary’s profile, you are going to be able to see the kinds of information she is interested in, not only in accumulating but also in sharing and this particular instance it looks like she has taken a more innovative approach to the CIO role and that’s not only going to serve as an icebreaker but potentially change your sales narrative.

All combined, this kind of social selling is leading to sales efficacy gain of roughly 50% as measured by some third-party researchers. It is still early days for us, but we are excited about what the future holds with regard to this, our newest major business line.

One common theme of priority that is going to touch all of our member value propositions, all of our customer value propositions will be increasingly mobilizing LinkedIn and we've already been doing this with regard to our talent, our infrastructure and our multi-app strategy.

You can see here, the flagship app last year we introduced, Recruiter and the acquisition of our Pulse news reader, and this is the year 2014 where we expect to reach our mobile moment, where over half of all of our traffic will be coming through mobile channels. So we believe we are very well positioned there. So this is where we are going to be focused in 2014.

Now, I would like to turn to the next decade and talk a little bit about where we see LinkedIn’s future and our vision. Our vision, our dream at the company is to create economic opportunity for every member of the global workforce, all 3 billion of them. And increasingly, we are now thinking about how we are going to operationalize this vision. It won't just be through north anymore; we’re going to start putting plans and roadmaps against this.

Along those lines, I thought it will be important to define what we mean by economic opportunities because it’s a pretty broad term. We are thinking about this in three distinct ways. For those that are unemployed, it's about finding work. For those that are gainfully employed, but uninspired by what they're doing, it’s about realizing your dream job, and for those that are already in their dream job, it’s about being great at that work and once you achieve greatness, it’s about giving back and sharing your insights and your perspective with others who aspire to be great as well.

We believe creating economic opportunity for our membership has never been more important than it is today. And there are many out there that would also support the notion, the creation of economic opportunity may be the defining issue of our time. Let me give you three data points as to why we think this is the case. First, 23%, for those that know, that’s youth unemployment rate in Europe and it’s actually greater than 50% in countries like Spain and Greece. 74 million young people between the ages of 15 and 24 are unemployed on a global basis. There was a lot of talk at the most recent World Economic Forum in Davos that if we don't get this right it could tear apart the fabric of society. It’s that important.

Second data point, 4 million, this is the number of available jobs that are in the United States according to the Department of Labor, the highest this number has been in at least the last five years. And what's so interesting about this number is there are over 20 million people in this country who are either, unemployed, or underemployed or marginally attached to the workforce and desperately looking for more work.

And yet the number of available jobs continues to climb, why? Because we have a widening gap between skills of our aggregate workforce and the opportunities that exist today. We need to start training people for the jobs that will be and not the jobs that once were.

Lastly, 250 million, this is the number of people in China that the Chinese would like to see moved and migrated from rural communities into the cities to create a thriving middle class, a quarter of a billion people. It would be the largest such migration of human capital in the history of civilization.

These are three daunting challenges, and they're just three among many that we face today. Yet, they are also extraordinary opportunities to make a profound and lasting difference in the lives of people on a global basis. And at LinkedIn, we believe we are uniquely positioned to make that kind of difference.

So how are we going to do it? We want to develop the world's first economic graph. Essentially, we want to digitally represent and map the global economy. So what would that mean for our members? Well let’s take Jason as an example. Jason is a real LinkedIn member. He was on the Senior Design Team at Nike for well over a decade. He is in the process now of transitioning to the d. school as a fellow at Stanford. We want to create a digital profile for every member, all 3 billion of them, every member of the global workforce, people just like Jason.

And we would like there to be a profile, digital profile for every company in the world and who you know at those companies up to three degrees to help you get your foot in the door. We would like to have a digital representation of every job offered by these companies, full-time and part-time for profit and volunteer. We would also like there to be a digital representation of every skill required to obtain these jobs. And a presence for every higher educational organization and learning and development tool that would enable the members to obtain those skills.

And lastly, we want to be in a position where we can overlay the professionally relevant knowledge for every one of those individual members, companies and universities to the extent they want to share it. Then we want to step back and allow capital, all forms of capital, intellectual capital, working capital and human capital to flow, to where it can best be leveraged and in doing so, help lift and transform the global economy.

None of what I just described is science fiction. As a matter of fact, all of those building blocks currently exist. 277 million members, 3.5 million active company profiles, 300,000 jobs, 3 billion endorsements representing tens of thousands of standardized skills, 24,000 schools and universities and billions of updates, network updates flowing through our platform on a weekly basis.

The only thing standing between us and the realization of this economic graph is scale and that’s going to require simply time. That’s how we are going to continue to connect talent with opportunity at truly massive scale. And that’s how we are going to enable every member of LinkedIn to control their economic destiny in the 21st century. Thank you.

Question-and-Answer Session

Scott Devitt - Morgan Stanley

So still a lot of growth ahead. And I think you secured an early draft slot with that presentation, only about 20% of the people have any idea of what I’m talking about. But one or two questions from me and then I want the audience to be able to socially connect with Jeff as well and so we’ll go to Q&A. Just wait for microphone to come to you.

Jeff, you talked about at the end of the presentation, the economic graph opportunity which is a significant one and seems to have been part of the vision of the company for some time. It’s longer duration in nature as we all know. I was wondering if you can talk to the few things that we can monitor over the next one or two years that will be commercialized and productized in terms of monitoring the success of that initiative.

Jeff Weiner

At the high levels it’s exactly what you’re monitoring today, the economic graph exists, so the part that’s 10 years out is the full realization of the economic graph, the 3 billion members every company in the world, there are as many as 70 to 80 million companies in the world. It’s that kind of scale that we’re talking about, but all of those building blocks exist and we track them, we track them as analysts and investors and we’re going to continue to invest across all six of those I mentioned.

Scott Devitt - Morgan Stanley

Okay. I’m going to go for one more and then I’ll turn it over to the audience. You talked about China. There has been a lot of news around your entrance into that market. Is there anything else that you can share in terms of the ambitions and you’re going to be able to successfully penetrate that market, given some of the issues that other U.S. based companies have had in China?

Jeff Weiner

Other companies have had issues in China.

Scott Devitt - Morgan Stanley

Okay.

Jeff Weiner

Okay, didn’t realize that. So yes, there have been a lot of challenges in the past. There is a lot of companies that have tried to get China right and have failed for various reasons. And having now experienced this preparation in the launch over the last 18 plus months, it becomes clear why it can be so challenging and sometimes it’s just the basics; it’s making sure you got the right talent in place. We’re extremely fortunate to hire in Derek Shen, President of LinkedIn China, and this is someone with experience working with larger scaling consumer web companies like Google and Yahoo!, had experience with Google China working with Kai-fu. He then went over to Renren. He started a company, really a separate company, an entrepreneurial company within that organization. And he is an engineer by trade and yet built a large scale sales organization, just really an unusual blend of skills. And I think it really starts with making sure you got the right leadership in place. And that can be incredibly challenging. So we are very fortunate in that regard.

We also in CBC and Sequoia China have two wonderful joint venture partners who I think can really add value in terms of navigating the landscape there. Organizationally, we are set up to be successful. These are all about the building blocks. It’s still going to be really challenging, but Derek reports directly to me, China is that important, and you can see looking back how challenging it would be for someone trying to start a Chinese presence for a company in the United States reporting to someone who potentially reports to the CEO and try to navigate that and trying to make sure he is getting the resources and prioritization that it requires.

So I think from a foundational perspective, we are in a better position. I think with regard to our core value proposition of creating economic opportunity you look at what’s going on in the Chinese marketplace today and trying to create a thriving middle class, this migration of 100 or rather 250 million people from rural areas into urban areas, I think it’s very well suited in terms of our value proposition, very well suited for where China is going. So I think these are some building blocks that position us somewhat uniquely.

Scott Devitt - Morgan Stanley

Okay. We have about 15 or so minutes and just raise your hand and then wait for the microphone to show up. There is one over here on this side.

Unidentified Analyst

Hi. How can you ensure that user profiles are accurate because surely that’s going to give you the credibility amongst recruiters?

Jeff Weiner

The question is how do we ensure that profile information is accurate among recruiters?

Unidentified Analyst

Yes.

Jeff Weiner

So there is an interesting nuance to a LinkedIn profile versus a traditional resume. When you develop a traditional resume you’re showing it pretty much to one person at a time, maybe you’re submitting it to a company and multiple recruiters are looking at it, but it’s not publicly available for the world to see. So it’s pretty easy to catch someone who is exaggerating or just lying about their professional experience and there are flagging mechanisms on the site. And I think before you even get to the flagging mechanisms by virtue of the fact the entire world can see whether or not you are telling the truth and triangulate that. And given the stakes that are in play here with regards to one’s professional identify and their livelihood, we don’t see much of that as you would say on a resume. And as a matter of fact with some third party research that was done several years ago and they found that LinkedIn profiles were more accurate than the traditional average resume.

Scott Devitt - Morgan Stanley

Back there.

Unidentified Analyst

Very powerful vision. What in your mind is the biggest challenge facing LinkedIn and your executive team to fulfill that vision?

Jeff Weiner

You know the challenge -- thank you for the question, the challenge today remains the same as it was when I first started with the company, December of 2008. We had 338 people at that time and today we’re in a handful of cities, today we’re north of 5000 employees, 26 cities around the world, the challenge is the exact same, it’s focus and scale. When you are managing a platform like this as the team does and there are so many different opportunities, there are so many different ways you can get pulled in different directions, it’s all about coming back to what it is you’re ultimately trying to accomplish and sticking to it and focusing on fewer things done better.

We started using the terms focus so often we actually turned it into an acronym. So when we talk about focus at LinkedIn, we’re talking about FCS. And the F is fewer things done better. The C is communicating the right information to the right people at the right time because as you scale up it becomes a lot more challenging, and you are communicating that information for the S, which is the speed and quality of our decisions because at the end of the day that’s how you create value of the company over the long term, it’s about the speed and quality of our decisions, making sure information is flowing in a way where you can make those high quality decisions quickly.

So it’s focus. And then from a scale perspective, it’s focusing on the basics, sometimes those are the less glamorous parts about running a business, and one of my favorite expressions in business is that managing a hyper growth company is like putting a rocket out into space. And if you are off by just a few inches at launch, you can be off by miles out in orbit because of the pace with which you are moving which means you have to invest in the launch, the launch pad, the launch trajectory and things that oftentimes are just not as interesting as the next breakthrough and the next innovation. So we are going to continue focusing on focus and we are going to continue to get scale right and it will be in the areas that we talked about today.

Unidentified Analyst

Just curious if the long-term vision depends on getting China?

Jeff Weiner

Depends on being in China is your question?

Unidentified Analyst

Yes. And is that why you are so focused on cooperating with China? And then down the road, do you become in effect potentially hostage to political issues in China if you are that dependent on them?

Jeff Weiner

So with regard to realizing the full vision, it starts even before the vision, you start with our mission statement which is to connect the world’s professionals to make them more productive and successful. And that's there because at that scale, it serves our members well and in a global economy that’s increasingly networked and digital it’s important to be able to connect folks, no matter where they live and no matter what they do.

And given China’s sheer scale, second largest economy in the world, first largest population, one of the United States’ largest trade partners, one of the largest trade partner for a number of countries on a global basis, we think we can create a lot more value for our membership in China and outside of China; [but then we can’t] [ph] by not being there.

With regard to the challenges that you face as a result of that, no doubt they are there and that was one of the reasons we took as long as we did to get started up from a localization perspective. We want to be extremely thoughtful about this and go into it with eyes wide open, and we are strong advocates for freedom of expression. We are completely opposed to censorship and yet recognize that to be able to create value for our members in China on a global basis we need to obtain a license to do business in China and to obtain a license for example we are going to have to filter content from time to time. And these are some of the trade-offs that we’ve tried to be as thoughtful as possible about; we also want to be as transparent as possible about that, and we are very clear from day one when we announced our launch that that was going to be our approach.

Unidentified Analyst

Last year you came out with a few products that were really successful at driving engagement efforts to Influencers, [the speed] [ph], Endorsements, I guess when you look at this year and next year in terms of trying to increase engagements, are you looking more at coming out with some more new products or is it just kind of incremental upgrade such as opening up Influencers to everybody specifically this year and next year?

Jeff Weiner

The areas we are going to be focused on this year whether it’s to drive growth engagement or modernization were the areas that we talked about today. So you mentioned broadening the Influencer capability, it’s really a publishing platform and Influencers is less a product going forward for us, it’s a person. And we will retain a very small group of those professional luminaries around the 500 mark. But in terms of broadening the platforms so that all members can share their experiences, their expertise, their insights, and uniquely integrate that with their professional identity, we think that's a potential game changer, not only in terms of the quantity and the quality of content, but in terms of the way people get engaged when they are sharing. Because as soon as you post, they are going to take a look and see how many views you have generated and who is sharing it, what kind of comments are being generated. What we’ve heard time and time again from our influencers is that they are seeing the highest levels of engagement, the highest quality engagement that they have seen when sharing that kind of content. And you think today it’s about the fact that's only occurred for roughly 500 people and with the announcement of two weeks ago, we are going to be broadening that to 277 million people, we are excited about that.

Another area that may be less intuitive on the surface in terms of an engagement driver was what I mentioned with regard to powering half of all of our customer’s hires, that's strategic objective under talent solutions and hiring. And what we found particularly within developing economies is that the students who are graduating, their number one most pressing need is a job and so we’re not just thinking about the number of jobs and talent solutions for monetization perspective, increasingly we are thinking about increasing the volume of jobs within these emerging markets and increasing the relevancy and our ability to get that job in front of the right member at the right time. And you start to dovetail that process and that product suite with some of the student-oriented products that I mentioned earlier and we think that also holds a lot of potential.

Unidentified Analyst

A year ago in 2Q ’13 you talked about a transition on the marketing solutions business to more, from these large branded display deals to…

Jeff Weiner

I was looking at this guy and his mouth wasn’t moving and I was like that’s it, cool, how he does that, it’s like an investor/ventriloquist.

Unidentified Analyst

Anyway, I was going to ask about the marketing solutions transition that you talked about in 2Q last year, where are you in that transition and when you think big picture and then we see what Facebook has done with mobile news feed ads in just recent quarters, it seems like a huge opportunity, is there anything inherently different about your business that would keep you from capturing some of those dollars? Thank you.

Jeff Weiner

So we are excited about the marketing solutions opportunity right now. We are still in transition as you mentioned from at times one-off larger deals that we didn’t necessarily believe could scale to a platform now with sponsored contents, specifically sponsored update where we can take that and with regard to the differences between a company like Facebook and LinkedIn, Facebook has very different levels of engagement.

So from a value proposition prospective, we think for any marketer, any blue-chip marketer that is trying to reach a professional by virtue of our targeting capabilities, by virtue of our context, we think there is going to be a lot of value there.

We also think there is an increasingly interesting opportunity in the conversions of marketing solutions and sales solutions, specifically with regard to B2B. There are still opportunities for B2C, professionals are consumers too, but the nexus of those two areas and social selling and the way in which companies will increasingly identity prospects generate the right engagement with those prospects to a follower relationship, get the right content in front of them, we think it holds a lot of promise. So still early days, still in transition, but very pleased with the results thus far today.

Unidentified Analyst

Yeah. I have got a question here. A very clear forward presentation, can you talk to the extent possible about the monetization of the opportunity? I see the revenue was extremely fast growing in the early days, now much, much slower growth, talk to us a bit about long-term future monetization of all this?

Jeff Weiner

Yeah. I think for starters they are going to remain within the three areas that we talked about today. So talent solutions, marketing solutions and sales solutions and those are three large addressable opportunities and it’s still early days.

With regard to talent solutions in addition to that flagship recruiter experience, by virtue of increasing the number of jobs, I think we can create more value for customers, we can also create more value for members, there is some interesting stuff we can do there with regard to the subscriptions packages that we can offer.

On the marketing solutions front, it’s very, very early, I mean we just started with regard to sponsored update in the stream, in the feed. We are very pleased with the mobile tractions that we are seeing thus far and to the extent we can continue to generate gains and engagement and get that flywheel spinning consistent in a way with how excited we are about broadening the publishing platform to all members I think there is a lot of opportunity there.

Sales solution is the newest one of these three business lines and sales solutions interestingly enough and we have mentioned this on previous quarterly earnings announcements and calls, sales solutions is tracking with our talent solutions business, but it’s lagging by about five years and so you see the growth that we achieved in talent solutions over the last five years and we think sales solutions holds a similar potential over the next five years.

Beyond that, I get this question a lot, what’s next and sometimes even our team says what’s next? And the immediate response is three business lines is plenty for now and we want to be as focused as possible. You can also think about our subscriptions capability which lines up nicely with each of those three businesses as its own platform.

And one of the things that we will be trying to accomplish in addition to those three areas is innovating on our subscriptions platform in a way that could bring more members on as subscribers of LinkedIn beyond the hire market itself. So those would be the intermediate and even longer term opportunities.

Unidentified Analyst

I wanted to go back to the Chinese opportunity and the Chinese question. An important part of the utility to the user is being part - getting knowledge, listening to Influencers, finding out what people are saying. How do you reconcile that with effect that in China that could be restrictive to some degree? And how do you build utility? How do you – and can connect at the same time?

Jeff Weiner

By virtue of the context in which we operate this notion of connecting professionals and creating economic opportunity, allowing people to share business intelligence and professionally relevant knowledge, that benefits the Chinese, that benefits the Chinese economy and it benefits members who are connected to those folks. It benefits multinationals who want to create a stronger presence in China that are seeking to higher and recruit the right people. So we do think we’re in a position where we can add a lot of value in that regard, even with some of the limitations.

Unidentified Analyst

Maybe you could talk a little bit about how you plan on further integrating Pulse, I guess, it just seems like it’s not really flowing that well into the main news feed and maybe that’s your decision not to do that but it seems like there’s a lot more opportunity for that to kind of naturally flow into the new feed and monetize?

Jeff Weiner

So I was smiling a bit because we actually renamed our entire LinkedIn today content offering Pulse. So you may be referring to the specific look and feel of the news reader application. But in terms of the stream of content on our homepage for example, which is really the hub of content sharing consumption on LinkedIn, that’s powered by Pulse, that has been drawing from some of Pulse’s technology in terms of feed access. Our Pulse leadership team is now managing that process. So there’s a lot of behind the scenes integration.

Going forward, we’re going to continue to invest and innovate in the way in which people are consuming news, not just through the mobile application but also through that desktop experience, our tablet experience as well. So there is some exciting stuff in the works there.

Scott Devitt - Morgan Stanley

Okay. I’ll interject here with one real quick while that’s coming. Around the question of growth in the talent - some of the questions that we’ve been getting have been around the -- that you’re talking more about smaller medium sized businesses in terms of the growth in that area. You and Steve have talked about 2 to 3x the opportunity within the existing customer base within talent solutions. Maybe clear that up a bit because I think that’s maybe where the core of the concern has been more recently around rate of growth.

Jeff Weiner

Yeah, we still think there is significant opportunity ahead of us with regard to our larger scale enterprise customers with regard to Talent Solutions. But Scott exactly to your point when you look at the total addressable opportunity, small and medium businesses has been less of a focus for us historically.

That’s now something that the team is prioritizing and that starts with identifying the small and medium size businesses and the founders of those companies, the people running those companies and creating the right member experiences for them. Making sure that our Talent Solutions offerings make sense for the smaller medium size business and that is going to continue to be a much bigger area of focus for us going forward.

Unidentified Analyst

Yeah. Hello. Your sales solution seems like it’s going to follow Talent Solutions in terms of scale. But when do you envision seeing any meaningful revenue from that solution, and how far behind that will the profits be?

Jeff Weiner

So, it’s been really interesting for us to be tracking Sales Solutions relative to the Talent Solutions business. And if you overlay the growth of Talent Solutions starting about five, six years ago, it’s remarkable how similar they are. And so we’re using that as a blueprint to better understand the opportunity in the performance of Sales Solutions going forward, so there is that five-year lag.

One of the things that will further accelerate our Sales Solutions business and penetration within the enterprise is going to be increasing the value we can deliver to our current Sales Solutions product portfolio. Today, it’s almost entirely attributable to subscription packages. But you can imagine a day where similar to the way Recruiter has emerged as our flagship product for recruiters and hiring managers in our Talent Solutions business we’d love to be able to find products like that for Sales Solutions customers as well.

Scott Devitt - Morgan Stanley

Last question? Up here in the front if you can…

Unidentified Analyst

Hi. With regards to the sales platform, I wondered, do you see any conflicts down the road at scale when you have cold calling at scale potentially deteriorating or damaging the user experience of the member base, how do you throttle that interaction and control that over time?

Jeff Weiner

We’ve been now offering the Sales Solutions products for some time now and have been pleased with the fact that we’re not seeing any increases in spam or significant declines in response rates. There are a couple of dynamics and mechanisms that we have in place that will help with that. One is our relevancy algorithms and making sure that when we’re suggesting potential prospect for a sales person or business development professional that it’s relevant and that’s going to work for both the sales person and it’s going to work for the prospect.

The other thing that we do is make it really easy for members to alert us when people are abusing the system. And so sales peoples’ livelihoods are at stake here and they are going to want to get the most out of the platform that they can. And so historically, we’ve seen that has created a disincentive for people to be exploiting the system in ways they shouldn’t. But thus far today we are really not seeing any of those issues. The other thing to consider is that, I think I speak for most of people in the room that we are already being inundated with email spam today that has absolutely nothing to do with LinkedIn.

And by virtue of getting this Sales Solutions value props right, we are actually thinking success, we can start to reduce the spam that you’ve been receiving because people can’t identify the right prospects. They have to cold call people as opposed to leverage mutual relationships to turn it into a warm prospect. They don’t know how to engage with their ultimate end user. And by virtue of providing those proprietary tools and leveraging our assets in a unique way, we think, we can actually improve the relevancy and experience all of us have today.

Scott Devitt - Morgan Stanley

Jeff, thanks for coming again this year. We appreciate it. Thank you.

Jeff Weiner

Thank you.

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Source: LinkedIn's CEO Presents at Morgan Stanley Technology, Media, & Telecom Conference (Transcript)

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