) has petitioned in a California federal court for the dismissal
of a lawsuit which alleged that the professional networking
company had hacked into customers' external email accounts.
In Sep 2013, some U.S. members of LinkedIn filed the lawsuit
in a federal court in San Jose, California, suing the company for
hacking their external email accounts and collecting contacts'
Moreover, the complaint stated that LinkedIn sent "endorsement
emails" to the addresses without their consent. The lawsuit also
requested the court to stop LinkedIn from violating data privacy
and return any revenues generated from such actions.
Dismissing all these allegations, LinkedIn stated that when
users click on buttons labeled "allow" and "add connections" in
the course of filling up details of their online contract, it
enables the company to contact users' addresses.
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, it is
worth noting that the company was acquitted in Mar 2013 and the
class action lawsuit was dismissed.
It therefore appears that this is a similar case, very likely
to go in LinkedIn's favor.
), stores a host of personal data in its servers and therefore,
data security is a priority for these companies. Although these
social and professional networking companies have a good policies
and security measures against external threats, there is a lack
of transparency when it comes to data utilization by the
Nonetheless, LinkedIn has good growth potential going by the
positive outlook provided by management and remains a force in
the professional networking space. Additionally, the company's
expansion in the mobile arena by launching apps for
) iOS and Android operating systems is a positive.
However, competition from Facebook, which is also prepping its
services to cater to business customers and professionals and a
volatile macroeconomic environment, could pose headwinds for the
company. Moreover, the emergence of companies likes
), which has been introducing new services at regular intervals,
could also bring about a rapid change in the scenario.
Currently, LinkedIn has a Zacks Rank #3 (Hold).
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