what happened
Shares in free market services Fiverr International (NYSE: FVRR) tumbled 12.6% lower today after several media outlets reported on it Microsoft (NASDAQ: MSFT) builds a competitive service through its LinkedIn affiliate.
Approximately
For example, TechRadar notes today that a new “LinkedIn Marketplaces” service will help companies in its network to find, connect, rent and pay for freelancers on the platform themselves. “
With more than 700 million professionals already on LinkedIn, the company has a deep pool of talent who should be able to use the new service to temporarily market their skills to employers. LinkedIn spokesperson Suzi Owens is quoted as confirming that freelancers can apply for appearances directly through your LinkedIn profile.
At the same time, Techradar reports that LinkedIn is creating a ‘digital wallet’ service through which employers can pay and freelancers can collect payment for services performed through the Marketplace.
Image Source: Getty Images.
Now what
Microsoft’s success with this venture is far from certain. But it sure sounds like the company wants to compete seriously with Fiverr. However, the fact that the freelance market nearly quadrupled its revenue within three years probably made Microsoft inevitable. When one company sees an opportunity and shows that it is attractive, it makes sense to expect competitors to want a share of the action.
The good news for Fiverr investors is that Microsoft has at least waited until Fiverr reaches free cash flow positive status (reached last year) before competing with it. At least Fiverr now has a fighting chance to fend off the competition.