LinkedIn Reports Q2 2014 Results

On July 31, 2014, LinkedIn reported its results for the second quarter, 2014. All product segments reported substantial year-over-year sales growth.

The strength and importance of its “field sales channel” group is, perhaps, atypical of its peers in the Cloud, SaaS market, and worth some words. This business segment produced $319 Million for the quarter, approximately 60% of total revenue. These sales represented a 73% increase over the performance of the same group in Q1, 2013.

In contrast, LinkedIn’s online sales for Q2, 2014, totaled $215 Million, or a 52.8% increase over the performance of the same business segment in Q1, 2013.

So, one can conclude, at least according to these results, the “field sales” segment is growing faster than online sales for LinkedIn.

According to an article written by Ingrid Lunden, and published by the TechCrunch web site on May 2, 2013, titled LinkedIn Stock Dips 10% On Slowing Growth, Even As It Beats Q1 Estimates On Sales of $324.7M; EPS $0.45, things looked a bit different back in 2013.

Lunden provides a definition of “field sales”, as a business segment, along with a prediction for its likely future performance: “Field sales, involving actual people, are more costly for LinkedIn and so the company will likely be trying to increase its online sales in quarters ahead to improve earnings as growth slows.” (quoted from Lunden’s article as published on TechCrunch).

So it is likely safe to assume the “field sales” team at LinkedIn looks a lot like a typical outside sales force, which, LinkedIn, in contrast to many of its cloud, SaaS peers, opts to deploy to produce most of its sales.

As per our quote, above, Lunden opines LinkedIn will likely try to reduce the proportion of sales attributable to this business segment over time. But 16 mos later the revenue share of this business segment looks flat, at 60%, but is actually growing at a faster pace, year over year, than its online sales sibling. Is it safe to say LinkedIn is actually increasing its field sales efforts?

In this writer’s opinion, the answer to this question is likely “yes”, and for good reason. If LinkedIn is to maintain a very fast growth rate this field sales segment will likely be even more important to its overall health than is the current case. Sales of methods to promote recruitment requirements to Fortune 1000 businesses in the US, like the kind powering LinkedIn’s results for Q2 2014, are still complex and show no potential for change. At least not for the near-term future.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

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