My Trefis

<b>Tell me more</b><br><br>Your LinkedIn valuation is hinged primarily on the company having about 470,000 business customers 6 years out, each paying on average about $28,000 annually to LinkedIn. This is up from an expected 11,000 business customers paying about $20,000 annually in 2012 and differs by more than an order of magnitude from the Trefis base forecast of about 37,000 business customers 6 years out. This difference accounts for the bulk of your price estimate of about $340 for LinkedIn vs. the Trefis price estimate of $44.<br><br>I would think it would be difficult for both the number of business customers and the average revenue per customer to increase substantially. The average revenue per customer is a mix of large institutions paying $100,000+ annually and smaller businessees paying <$10,000 annually. The growth is likely to come primarily from smaller businesses which should drag down average revenue per customer. <br><br>LinkedIn will try to mitigate this decline by adding more features that it can offer / upsell, but it will be hard to get smaller businesses to pay nearly $30,000 on average annually for recruitment tools.<br><br>Many of the type of players that can write $30,000 annual checks for recruitment tools like banks, consulting firms, law firms, later stage startups, software cos (basically any service firm where human capital is the main input) are likely to be already signed up or signed up within the next few years. What kind of firms do you expect to make up the next 300,000+ business customers?