What happened
Shares of freelance services marketplace Fiverr International (NYSE: FVRR) tumbled today to close 12.6% lower after several media reported it Microsoft (NASDAQ: MSFT) builds a competitive service through the LinkedIn subsidiary.
So what
TechRadar, for example, notes today that a new “LinkedIn Marketplaces” service will help network companies “find, connect, hire and pay freelancers all on the platform itself.”
With more than 700 million professionals already on LinkedIn, the company has a deep pool of talent that will be able to use the new service to market their skills to employers temporarily. LinkedIn spokeswoman Suzi Owens is quoted as confirming that freelancers will be able to apply for concerts “directly through your LinkedIn profile.”
At the same time, Techradar reports that LinkedIn is working on creating a “digital wallet” service where employers can pay, and freelancers can collect payment for services performed through the Marketplace.
Image Source: Getty Images.
What now
Microsoft’s success with this venture is far from guaranteed. But it certainly sounds like the company is seriously competing with Fiverr. The fact that the freelance market has almost quadrupled its revenue in just three years probably made Microsoft’s move inevitable. When a company discovers an opportunity and shows that it is attractive, it is logical to anticipate that the competitors will have a share of the action.
The good news for Fiverr investors is that Microsoft at least waited until Fiverr achieved free cash flow positive status (reached last year) before moving to compete with it. At the very least, Fiverr has a chance to avert the competition.
