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LinkedIn Building New Data Centers as Revenues Grow

LinkedIn had its best year ever in 2013, as membership numbers swelled and mobile usage continued to gain. LinkedIn reported its fourth quarter and full year fiscal 2013 results late Thursday, as the online service topped 277 million members. For the quarter, revenue came in at $447.2 million, a 47 percent year-over-year increase. Net Income […]

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Sean Michael Kerner

Feb 7, 2014

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LinkedIn had its best year ever in 2013, as membership numbers swelled and mobile usage continued to gain.

LinkedIn reported its fourth quarter and full year fiscal 2013 results late Thursday, as the online service topped 277 million members. For the quarter, revenue came in at $447.2 million, a 47 percent year-over-year increase. Net Income for the fourth quarter was $3.8 million, a decline from the $11.8 reported in the fourth quarter of 2012.

Looking forward, LinkedIn said first quarter revenues will range between $455 million and $460 million, representing 40 to 42 percent year-over-year growth. For the full fiscal 2014 year, LinkedIn is expecting revenue in the range of $2.02 billion to $2.05 billion, representing 32 to percent growth.

LinkedIn CEO Jeff Weiner said during his company’s earnings call that membership numbers for the site grew by 37 percent year-over-year.

“LinkedIn added nearly 75 million members in 2013, the largest single year gain in the company’’s history,” Weiner said. “More than 70 percent of them came from outside the U.S., bolstering our status as a truly global network.”

As is the case with other social networking services like Facebook and Twitter, mobile access is a key driver for future growth. Weiner said that LinkedIn made significant progress toward becoming fully mobilized in 2013. At the end of 2013, mobile traffic represented 41 percent of unique visits to LinkedIn.

“In 2014, we expect to reach the point where most LinkedIn members access the site via mobile devices,” Weiner said. “Mobile will continue to be a major area of investment in 2014.”

New Data Centers

A core area of focus and investment for LinkedIn in 2014 will be in new data centers. CFO Steven Sordello said during the earnings call that the company’s goal is to host LinkedIn on a self-managed infrastructure.

By having that self-managed infrastructure, the idea is that LinkedIn will be able to control capacity growth while more efficiently managing its cost structure. Sordello estimated that there will be approximately 50 percent in operational cost savings once each facility is fully tested and operating at scale.

“In executing this strategy, our objective is to build three self-managed data centers globally, the first of which went live in Q4,” Sordello said. “We plan to build a second this year, and a third in 2015.”

In addition to the projected cost savings, Sordello said that LinkedIn’s site speed and overall experience will also be improved as a result of the data center initiatives.

Overall, LinkedIn’s CEO sees his company at an inflection point as it enters 2014.

“Our mission is to connect the world’s professionals to make them more productive and successful,” Weiner said. “Five years ago, this was largely aspirational. In 2008, we had just over 30 million members and we close 2013 with nearly ten times that figure, roughly half of the world’’s knowledge workers.”

Sean Michael Kerner is a senior editor at Datamation and InternetNews.com. Follow him on Twitter @TechJournalist