XING hits its numbers, keeps growing
March 28 Mike Butcher
XING, the German-born social network for professionals which has spread across Europe and Asia and now competes with Silicon Valley’s LinkedIn, has released its annual report and the numbers look pretty good. It’s met its annual guidance for 2007 with revenues of €19.61 million ( about $30.98 million) and the member base increased by over 3 million members (through acquisitions and organically) reaching nearly 5 million. By contrast LinkedIn has a million members in the UK and another four million across Europe. It claims to have the highest growth in paying members in social networking. It has also established new revenue streams in eCommerce and advertising.
In its first full financial year, XING achieved revenues of €19.61 million and an operating EBITDA of €6.89 million. This corresponds to an EBITDA margin of approximately 35.2 percent. Earnings per share for FY 2007 amounted to €1.10. In other words it nearly doubled revenue for the year and achieved an EBITDA margin of 30-35 percent.
Over the last year it has acquired the Spanish platforms eConozco and Neurona, bringing its member base to approximately 4.83 million. At the end of the financial year, XING had approximately 362,000 paying members, up from 221,000 paying members at the end of 2006. A few weeks ago, XING says it hit 400,000 paying members.
The “eCommerce” it introduced in October 2007 contributed approximately €0.40 million in revenue, mainly from job listings posted on the platform. Advertising started around the same time and resulted in revenue of €0.75 million
I really wonder what the exit strategy is with XING, but Given that LinkedIn is probably going to want to scale even more across Europe and Asia, XING seems like it’s well on the road to becoming an acquisition merger target. In 2006 XING IPO’d raising €35.7M.
Comments
March 28th, 2008 at 3:19 pm
Pretty impressive figures when compared against LinkedIn in Europe… is there any info on where their membership is though? I know it used to be pretty much all German members, may be worth another look now though.
March 28th, 2008 at 3:53 pm
@Dan to give you a little insight: 64% of all XING members are already not coming from Germany.
March 28th, 2008 at 4:35 pm
@Daniela Thanks, I’ll take a look.
March 28th, 2008 at 5:30 pm
just seen today: xing is doing subway videoscreen advertising in vienna now.
March 29th, 2008 at 12:23 am
Mike, isn’t your question about an exit strategy a little odd? - they already IPO’d!
March 29th, 2008 at 3:12 pm
xing is making money because they scam members who shell out the premium fee. once you start paying the premium fee, you have to cancel it a year in advance… they automatically renew a year after you join, without an email alerting to the upcoming charges or status, and then if you want to cancel the premium when you realise (ie, forgotten) about the fee, they won’t do it. even if you contact them the same day the charge is made without warning, they won’t cancel for a full year. rude customer service responses, too.
March 29th, 2008 at 3:13 pm
they have a long reputation of this kind of scamming members. a long list of complaints.
March 29th, 2008 at 11:55 pm
Id really like to know if what Dasein is saying is true or just made up.
Can somebody tell us more
March 30th, 2008 at 6:59 am
let me rephrase so there’s no misunderstanding… for the premium renewal, xing’s policy is that you opt-in for the renewal a year previously, when you sign up for it. you do not opt-in at the time of renewal, nor does xing send out any reminder that your subscription is about to expire, and that they will automatically renew. default for nearly all subscription sites is if you do not specifically opt in at the time of renewal, your subscription cancels.
xing relies on the opposite, hoping that you’ll forget about it and once the charge on your credit card is made, you’re stuck for another year. if you request cancellation after that charge is made, they say they will cancel your premium account in a year.
a german acquaintence who used to work in xing’s marketing department says this policy is the number one complaint they receive, and that xing does not care that it irritates it’s members… the revenue is good.
under german law what they are doing is dubious, but their pockets are deeper than most of their members.
xing has no public forum discussions, so there is no collective sense of outrage within the community, nor any way to alert other members of the issue.
they also have had numerous complaints by their suppliers and subcontractors about xing’s arrogance. much of this was before their recent name change, when they were called openBC.
March 30th, 2008 at 7:04 am
the attitude of their response when you complain, and their complete disregard for the scam, shows a lack of respect for their members. this lack of respect and overt sense of arrogance has been a historical complaint against xing/openbc from the start, both by members and suppliers.
March 31st, 2008 at 2:32 pm
I’m not sure what the problem is, but my experience with Xing has been completely different. I’ve been a premium member of Xing for just over a year now, and imo, the customer service is great.
Take just one example: I posted a job on their Marketplace, and for some reason, there was a booking error last month. Not only did they fix the problem, they credited my account!
And if that wasn’t enough, I got a call from someone in the marketing department (probably not your friend, dasein!) to apologize.
March 31st, 2008 at 2:38 pm
@dasein–I just looked at the Xing terms and conditions, and although I’m not a lawyer, it looks like pretty standard stuff: you can cancel your account two weeks to the end of the contract, blahblahblah.
See for yourself: https://www.xing.com/app/user?op=tandc#6
April 1st, 2008 at 11:29 pm
@ dasein - What you are saying doesn’t sound right to me either. The ToS are pretty standard and as a listed company they cannot afford to get bad publicity. Furthermore, in Germany ( I know, I life there) they have an excellent reputation. All the top German (and now Spanish and Turkish) executives are on the site, and it is pretty much standard to use the site for making contact, arranging meetings and doing business.
I have been a premium member for over two years and I can cancel my membership with 3 months notice. They also have a great customer service department so never had any problems.