Nevertheless, the professional networking site, which went public on May 19th, plans to increase the proportion it spends on future sales and marketing. According to its IPO prospectus, LinkedIn’s sales and marketing costs amounted to 15.8 percent of net revenue in 2006 and that amount had increased to 24.3 percent by 2010.
“Normally the reverse of that trend might be expected as the
Commenting on that increase, Willott said “The figures from LinkedIn suggest it may be having to spend more and more money to generate and keep its paying customers or, worse still, to replace disappointed customers with others.”
As the valuation debate continued about LinkedIn’s stock market debut, the site’s shares took a hit yesterday. The stock closed 5.15 percent lower at $88.30 a share after being off by as much as 10 percent earlier in the day.
Source:http://www.adweek.com
