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LinkedIn looks to build on its impressive resume

Michael Liedtke (via AP/ SMH) | May 14, 2013
LinkedIn's stock has nearly quadrupled in value from its $45 IPO price on May 20 two years ago while Facebook's stock is hovering around $27 per share, down 29 percent since debuted on May 18, 2012 at $38.

But the odds of LinkedIn fulfilling its aspirations may be less of a longshot than the one Hoffman faced when he first started pondering a professional networking service in the midst of the dot-com bust in 2000.

At the time, Hoffman was worried about losing his job as a top executive at online payment service PayPal. The company had just burned through most of its cash, prompting Hoffman to mull other ideas with PayPal co-founders Peter Thiel and Max Levchin during a retreat at his grandparents' house in Gualala, Calif. along the Pacific Ocean's coastline.

A rough concept for LinkedIn came up then, but Hoffman didn't pursue it at the time because PayPal started to thrive.

After eBay Inc. bought PayPal for $1.5 billion in 2002, Hoffman plowed much of the money that he made from that deal into LinkedIn. He started the company in May 2003 with several former colleagues from his pre-PayPal days _ Allen Blue, Konstantin Guericke, Eric Ly and Jean-Luc Vaillant. The group debated several potential names, including Netra, Wellconnected, Bizrep and Connex, before settling on LinkedIn.

Hoffman's gamble paid off. As LinkedIn's controlling shareholder, his stake in the company is currently worth $3 billion.

LinkedIn now has market value approaching $20 billion and employs about 4,000 people. It's expanding so quickly that it is running out of space at its Mountain View, Calif. headquarters located down the block from the home of Google Inc. There will be space for nearly 3,000 more LinkedIn workers once construction is completed on its new corporate campus in nearby Sunnyvale next year.

Things might not have worked out so well if Hoffman, 45, and Weiner, 43, hadn't been introduced to each other at a technology conference in early 2008. They hit it off immediately, something Hoffman remembered a few months later when he began thinking of replacing Dan Nye as LinkedIn's CEO.

Hoffman had been LinkedIn's CEO during the first four years of the company's existence, and he knew it wasn't something that he wanted to do for another extended period _ an aversion that differentiates him from other Internet visionaries such as Google's Larry Page, Facebook's Mark Zuckerberg and Salesforce.com Inc.'s Marc Benioff, who all relish running the companies they founded.

"I like solving business strategy problems and I like creating whole new ecosystems for people," Hoffman said. "I am not passionate about leading a 3,000-person plus organization and all the work that goes into doing that in a world-class way. I always knew I didn't want to be CEO forever, but I still wanted to get LinkedIn to where it needed to get."

That's where Weiner came into the equation. Weiner had recently ended a seven-year stint as a key executive at Yahoo Inc. and was helping out various startups on a part-time basis as an entrepreneur-in-residence at venture capital firms Greylock Partners and Accel Partners.

 

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