What happened
Freelance services market shares Fiverr International (NYSE: FVRR) fell today to close 12.6% below after several media reported that Microsoft (NASDAQ: MSFT) is building a competing service through its subsidiary on LinkedIn.
And
TechRadar, for example, notes today that a new “LinkedIn Marketplaces” service will help companies in its network “find, connect, hire and pay freelancers on the platform itself”.
With over 700 million professionals already on LinkedIn, the company has a large pool of talent who should be able to use the new service to spread their skills to employers on a temporary basis. LinkedIn spokeswoman Suzi Owens confirms that freelancers will be able to apply for jobs “directly through their LinkedIn profile”.
At the same time, Techradar reports that LinkedIn is working to create a “digital wallet” service through which employers can pay and freelancers can receive payment for services performed through the Marketplace.
Image source: Getty Images.
What now
Microsoft’s success in this endeavor is far from guaranteed. But it appears that the company is serious about competing with Fiverr. The fact that the freelance market almost quadrupled its revenues in just three years probably made Microsoft’s move inevitable. When a company identifies an opportunity and shows that it is attractive, it is logical to anticipate that competitors will want a part of the action.
The good news for Fiverr investors is that Microsoft at least waited until Fiverr reached positive free cash flow status (achieved last year) before moving on to compete with him. At least now, Fiverr has a chance to fight to defend himself against the competition.