LinkedIn Cites China Censorship As IPO Risk - InformationWeek
Software // Social
02:20 PM
Building Security for the IoT
Nov 09, 2017
In this webcast, experts discuss the most effective approaches to securing Internet-enabled system ...Read More>>

LinkedIn Cites China Censorship As IPO Risk

The business social networking site said the company's value could be hurt by a ban in China. It also reported revenue of $243 million in 2010.

LinkedIn updated its initial public offering documents, reporting 2010 revenue of $243 million and warning of the potentially negative impact a ban by China could have on the business social networking site's financial future.

In an amendment filed March 11 and released on Monday, LinkedIn said a block by China's government is among the circumstances under which "the value of our network could be negatively impacted." Its original prospectus, filed on Jan. 27 with a valuation of $2 billion, did not mention China.

However, on Feb. 25, amid concerns about a pro-democracy rally spurred-on by similar events in Tunisia, Egypt, and Libya, China barred access to LinkedIn. Facebook, YouTube, and Twitter also were blocked.

"The government of the People's Republic of China recently blocked access to our site in China for a short period of time," the most recent filing said. "We cannot assure you that the Chinese government will not block access to one or more of our features and products or our entire site in China for a longer period of time or permanently."

LinkedIn also faced some accounting challenges, and was forced to restate its earnings for 2006 and 2007 because of a "material weakness" in its financial reporting internal controls, according to the company.

"Although we believe the actions we have taken will remediate these significant deficiencies during 2011, we may fail to do so or could experience unforeseen difficulties causing new significant deficiencies or material weaknesses. In addition, we may need to operate for an extended period of time with the new or revised controls in place before these significant deficiencies will be determined to be remediated," LinkedIn said. "If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our Class A common stock to decline."

LinkedIn said for the 12 months ending Dec. 31, it generated net revenue of $243.1 million, more than double the $120.1 million it took in a year earlier. Net income for the year was $15.4 million. The company plans to expend most of its resources toward growth, it has said.

"In 2011, our philosophy is to continue to invest for future growth, and as a result we do not expect to be profitable on a GAAP basis in 2011," LinkedIn said in its IPO filing.

The site's usage continues to grow: By the end of last year, LinkedIn had 90 million members, compared with 55 million members in the year-ago period, according to the company. For the last three months, ended December 2010, there were an average 65 million unique visitors to its Web site vs. an average 36 million for the three months ended December 2009, LinkedIn reported.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll