LinkedIn's voluminous founder, Reid Hoffman (shown here), envisioned the site as the embodiment of his voracious appetite for meeting business partners. Social networks? Useless fluff, when everyone who walks through the door of Palo Alto's Coupa Cafe is someone Hoffman could hire, invest in, or strike a deal with.

Despite its business focus, LinkedIn has struggled to make money. Its main revenue stream, premium accounts for heavy users, depends heavily on recruiters, who are looking for jobs themselves these days. Under Nye, an experienced software salesman, the company toyed with becoming a so-called "expert network," an operation which matches up people hungry for knowledge with those who have it. Stock traders, especially, pay handsomely to talk to executives in companies whose shares they want to trade — a part of the business which can veer on breaking insider-trading laws, if contacts aren't carefully monitored.

Bain, the management-consulting firm, was so interested in the potential for this kind of matchmaking that it invested in LinkedIn's most recent $75 million round, which valued the company at $1 billion. But the ineptness of LinkedIn's middle management meant that the expert-network product never got off the ground. And the business as a whole badly missed the financial projections management had given investors, which infuriated Bain and others.

This may explain why Hoffman abruptly cancelled a trip to Japan, where he was due to speak at a conference, to oversee the company's recent layoffs. The company has hired a former Google executive, Dipchand "Deep" Nishar, and Jeff Weiner, a former top executive at Yahoo, has stepped in as its interim president.

Hoffman may have to do far more to save his company. A gregarious fellow who has invested in a host of startups, Hoffman is famously nice and good-hearted. And he prefers the dreamy work of strategy to the hard tasks of building a business. Is he prepared to fix LinkedIn? Or does he still think his company's problems can all be solved by making the right connections?

Have you heard that Linkedin is going to be announcing layoffs [Wednesday]? Happy holidays I suppose. how much time do their employees have before they need to pack up their desks?
Linkedin runs scared during the down turn of the economy. If they've just raised all that money why are they doing layoffs? Or are they just cleaning house?

Linkedin last year canned their superman and then fired a director for comments made to a female employee....what else is going on behind those doors?

The CEO, is he really incharge or is Reid still incharge, you should ask the employees. They have a habit of hiring executives that have no experience in what they are suppose to be doing at linkedin. Let's take a look at the recent vp of hr Arvind, what hr experience does he have? Was he hired because he's a friend of reid? do they hire the right people to do the right jobs? Have you looked at their directors or vps?

I have close connections to the company. Sequoia is telling all their companies to get rid of 10% of their employee base. Reid doesn't want to, but can he stand up to Sequoia? Can the money LinkedIn raised disappear? Are they running scared with their tales between their legs? So what will they do, is this just the beginning? Why are they still hiring if they are doing layoffs? Who's on the top of the list? Any of their heavy execs? With offers just accepted by people to go to Linkedin should they be worried about the choice they've made? The new apps they released last week were weak. They had so many bugs in the new apps, and weren't even able to release all of them because of the bugs. Who's doing the QA work at Linkedin? Rumor is they lost their QA director recently too.

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In the last 3 months the flying bullshit has gotten so thick that all of us below senior management have started to be able to systematically disprove half of what management tells us. Even management themselves change things they had formerly declared as factual.

If you ask any of the top three managers what our strategy is for an open API vs. threats from Google etc they will all three give you a different answer. Wait a week [and] ask again and then they all give new different answers.

We miss our objectives on every feature add, interface change, hardware move and anything else management declares. LIAP is a non-scaling disaster.

Worst of all we have now missed every financial objective set by Bain Capital after investing $50M in us. Not once but twice we have missed revenue and bottom line goals. The debate about who's fault this is is lively enough that one can tickle each manager for trouble and they will throw each other under the LinkedIn bus. (By the way management got a minibus to ferry almost no one to work from San Francisco because Google does it, (CEO penis envy) but the staff joke that the bus is to throw people under in this culture where the PR is hot but the business is not)

Missing numbers is not a secret, management stood up at an off-site in Monterey and said "we are going to every group and telling them the facts that we missed our goals again and that Bain is really mad" This is really comforting to the staff when the next day the same guy is on CNBCs websit saying we are profitable (not even close).

The only thing we seem good at doing on time is spending too much money. Management told us this summer that Goldman Sachs was investing $25M more in us and the details would be forthcoming. (said it was a done deal) (scared to death that we would need this) well I just learned GS said NO! 2 months ago, management just hasn't bothered to tell us.

It's a shame because it was a good company that had endured enough before it became so full of false confidence that it passed on the window of opportunity that was there to sell for good money.

What the fuck is going on over at LinkedIn again? They've lost 2 more directors in the past 30 days, for what looks like STUPID reasons. Simple crap like reprimanding employees for fucking things up. They lost their Director of Operations a few days ago, their Director of IT a couple of weeks back and Director of Business Operations. I've got it on good authority that there were some other housecleaning items done in the past few weeks as well within their Operations team. It's like a fucking morgue.

Word is that the employees are taking the upper hand with complaints against management, and that upper management is all too happy to get rid of people just before they hit their 1-year stock vesting. Don't get on the shit list of upper management or your time will come.

One guy in particular keeps coming up with people I talk with — Lloyd Taylor. he's the guy who came over from Google. And the door couldn't have hit him in the ass fast enough, and now that he's being told to go back and "play nicely" with the Google team, he's finding that he has no friends over there. They won't even deal with him any more. It sure looks like his frustration is being taken out on his management team.

I was present during a recent all-hands meeting where Dan and Reid made repeated references to "culture" and "culture changes", speaking as if they know they're changing in the wrong way. But this isn't the way to deal with it.

I hold so little hope for them any more. Just fucking sell to someone and get this over with already.

Regulators frown on free communications between knowledgeable company executives and information-hungry investors. LinkedIn offers "compliance" tools, but those tools amount to letting the fox electronically monitor the henhouse. Hedgies surely realize this, and will see LinkedIn's lax policies as a selling point. (Other firms which connect investors with company insiders have, at some expense, created systems which allow the experts' employers, not just the investment firms, to monitor contacts.)

If it gets in trouble, LinkedIn will likely plea that it didn't know how its networking site was being used — the standard we're-just-a-platform dodge. But it will be hard to claim that for two reasons. First, LinkedIn is touting the account managers it's providing who will actively help traders use the service. Second, CEO Dan Nye previously worked at Advent Software, a company which provides portfolio-management software to Wall Street firms. It's not like he's unfamiliar with the SEC's disclosure and monitoring requirements. Rather, one has to think he knows just how expensive complying with those rules are, and that rejiggering LinkedIn's software to obey them will make LinkedIn Research a nonstarter.

It's not a stretch to imagine how an ambitious government prosecutor could make a case for LinkedIn aiding and abetting insider trading. The law doesn't even require that money change hands; exchanging inside information for a thumbs-up reference on LinkedIn could very well qualify as a breach of the rules.

But that assumes anyone in Washington or New York is paying attention. Unlikely, given the mortgage mess. LinkedIn will likely go public on the basis of its hedge fund-juiced revenues long before an overtaxed SEC gets around to looking at how, exactly, the avaricious traders of Greenwich are getting their information.

Previously:

• A is for Adelson, who cofounded Digg


• B is for Botha, who sold YouTube big


• F is for Fitzpatrick, and "hookers and blow"


• L is for Levchin, who never goes slow

A manager interrupting a report's search for a job outside of linkedIN by calling his connections with prospective employers and telling them not to hire

An employee told by her manager that she needed to choose between her job and her family, or LinkedIN was not the place for her

An employee physically accosted by his manager's wife, and then fired when asking HR for help resolving the issue

Each of these things has happened at LinkedIN over the past few months; Each of the managers involved has been a recent hire, brought in by Dan Nye to manage long-time LinkedIN teams. What happened? How did LinkedIN middle management get to such a state?

He continues:

The answer is obvious: By concentrating on growth, and only growth, LinkedIN has exploded to almost three hundred employees in the last year. think about that: people who have been at linkedin less than 9 months outnumber people who have been there more than 9 months by almost two to one.

This means that LinkedIN is undergoing an identity crisis internally. Deathly afraid of looking weak, or having made the wrong decision, upper management has closed ranks, ruthlessly squashing individual contributors who rock the boat, or even question bad hiring decisions. And, lets face it, Dan Nye's hyperbole about only hiring ' the best' aside, any time a company goes on a rapid hiring binge, like LinkedIN has, there are bound to be mistakes.

But is LinkedIN cutting off its nose to spite its face by taking draconian measures to keep its employees quiet? When an operations employee warns an executive that a new director's bad technical decisions will result in an outage within the next six to eight months, should that executive investigate the issues, or tighten ranks, and dismiss the employee? Obvious, right? And yet, LinkeDIN appears to have made the wrong decision; any issue brought to HR is immediately brought to LinkedIN's legal team, who appear to be resolving the issues based on whether the complaint is feasibly actionable, and whether the employee in question can be threatened into silence. Ouch!

One thing that might explain it is that LinkedIN is attempting to coast to the end game, and is not looking beyond IPO or acquisition. Because, let's face it - rumors flying of bad technical and personnel choices hurt the bottom line. But the rank-and-file attitude at LinkedIN has changed over the past year from 'we're all in this together' to 'I need to keep my head down until the IPO'

Fortunately, LinkedIN has a good brand, one that has a lot of value. And that can make up for a lot of bad choices. But at the end of the day, will the disastrous expansion LinkedIN cause it to wobble completely out of control?

With LinkedIn projected to earn 2008 revenue between $75 million to $100 million, former LinkedIn exec Keith Rabois, now at Slide, told the paper Hoffman and company need to go public sooner rather than later.

"Right now, LinkedIn just doesn't seem to be at the center of the Internet universe and an IPO would be an amazing marketing opportunity," he said.

Others aren't so bullish. After CEO Dan Nye said the company would only sell for "a lot more" than $1 billion, Silicon Alley Insider guffawed, noting that career site TheLadders.com recently poached LinkedIn's former head of corporate sales, Brendon Cassidy, with ease. Would he have stayed if he believed in LinkedIn's revenue upside? That's the question the Herald should have asked Rabois.

In the spring of 2006, Facebook let it be known that it wouldn't consider acquisition offers under $2 billion. Most laughed it off. But come this fall, of course, Microsoft and Google fought for the privilege to set Facebook's value at $15 billion. Sure, Facebook has the numbers to back the hype, but so does LinkedIn, which actually outgrew Facebook in the past year.

Facebook's fastest growing demographic are those 25 and older. Members can now check off "networking" as an interest in their profiles. But Nye said he's doesn't feel threatened. Why?

Semantics. Facebook, he explains, is a social network. LinkedIn is for professional networking, he said. Oh. OK, so that doesn't really explain anything. But we'll help. One actual reason Nye can be optimistic is that unlike Facebook, some members find LinkedIn's service worth paying for. Nye said premium memberships will have grown 300 percent by the end of 2007. That's because LinkedIn is essentially a business-to-business play, which some human resource departments depend on to help find new talent. Of course, Nye didn't give actual numbers for premium memberships. It's easy to grow 300 percent if you buy a membership and get three friends to sign up.