As per Bloomberg,
) may face a lawsuit for accessing customers' external e-mail
accounts and their contacts' addresses for marketing purposes.
LinkedIn customers are required to give an external email ID as
This follows the opinion of U.S. District Judge Lucy H. Koh that
frequent invitation emails "could injure users' reputations" and
lead their contacts to consider these emails as spam. Aggrieved
users had requested U.S. District Judge Lucy H. Koh to stop
LinkedIn from violating their privacy and return any revenues
generated from such actions. The complaint stated that LinkedIn
used these IDs to send 'endorsement emails' to contacts of its
users, without their consent. So affected users can now pursue the
case to claim damages from LinkedIn. .
The current spate of allegations, if proven true, will hit
LinkedIn's reputation. In Jun 2012, the company was sued for
breaching 6.5 million LinkedIn users' passwords. However, the
company was acquitted in Mar 2013 and the class action lawsuit
It is worth noting that till now LinkedIn has denied all the
allegations and stated that it had acquired the consent of its
users while sending or contacting anyone from the acquired
contacts. It therefore appears that this case is quite similar to
the previous one and therefore likely to go in LinkedIn's favor.
), stores a host of personal data in its servers and therefore data
security is a priority. Despite the best efforts by social and
networking companies to incorporate strict user policies and
security measures against external threats, incidents of hacking
Thus, resolving the current issue is a priority for LinkedIn.
Stricter data usage guidelines should be initiated so that such
occurrences are averted in the future. Moreover, with strong growth
potential and a positive outlook provided by management, LinkedIn
remains a force to reckon with in the professional networking
Additionally, the company's expansion in the mobile arena by
launching apps for
) iOS and
) Android operating systems is a positive.
Nonetheless, continued investments to provide new and improved
products and services might affect its profitability. Though
impacting LinkedIn's operational performance in the short run,
these investments are necessary for member growth and user
engagement over the long term. We remain encouraged by the sturdy
top-line growth recorded in the past few quarters.
LinkedIn thus remains a pioneer and a leading professional
networking company with a wide industry reach. This enables it to
explore and tap into every opportunity to connect the global
Currently, LinkedIn has a Zacks Rank #3 (Hold).
(We are reissuing this article to correct a mistake. The
original article, issued Friday, June 13, 2014, should no longer
be relied upon.)
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