Free market shares Fiverr International (NYSE: FVRR) fell today to close 12.6% lower after numerous media outlets reported Microsoft (NASDAQ: MSFT) builds a competitive service through its subsidiary LinkedIn.
TechRadar, for example, notes today that a new LinkedIn Marketplaces service will help companies in its network “find, connect, hire and pay for free on the entire platform.”
With more than 700 million professionals already on LinkedIn, the company has a wide range of talents who should be able to use the new service to sell their skills to employers temporarily. LinkedIn spokeswoman Susie Owens confirmed that freelancers will be able to apply for concerts “directly through your LinkedIn account.”
At the same time, Techradar reports that LinkedIn is working to create a “digital wallet” service through which employers can pay and freelancers can collect payments for services provided through the Marketplace.
Microsoft’s success in this endeavor is far from certain. But it certainly sounds like the company is seriously competing with Fiverr. The fact that the freelance market nearly quadrupled its revenue in just three years probably made Microsoft’s move inevitable. When a company sees an opportunity and shows that it is attractive, it is logical to predict that competitors will want some of the action.
The good news for Fiverr investors is that Microsoft at least waited for Fiverr to achieve positive free cash flow status (achieved last year) before moving to compete with it. At least now Fiverr has a fighting chance to beat the competition.