Independent services market shares Fiverr International (NYSE: FVRR) fell today to close 12.6% lower after various outlets reported that Microsoft (NASDAQ: MSFT) is building a competitive service through its subsidiary LinkedIn.
TechRadar, for example, says today that a new “LinkedIn Marketplaces” service will help businesses in its network “find, connect, hire and pay freelancers right on the platform.”
With more than 700 million professionals already on LinkedIn, the company has a wealth of talent that should be able to use the new service to market their skills to employers on a temporary basis. LinkedIn spokeswoman Suzi Owens is quoted as confirming that freelancers will be able to apply for jobs “directly through their LinkedIn profile.”
Simultaneously, Techradar reports that LinkedIn is working to create a “digital wallet” service through which employers can pay and freelancers can charge for services provided through the Marketplace.
Microsoft’s success in this endeavor is far from assured. But it sure looks like the company is serious about competition with Fiverr. However, the fact that the freelance market has nearly quadrupled its revenue in just three years likely made Microsoft’s move inevitable. When a company detects an opportunity and shows that it is attractive, it is logical to anticipate that competitors will want a piece of the action.
The good news for Fiverr investors is that Microsoft at least waited until Fiverr reached positive free cash flow status (achieved last year) before moving on to compete with it. At least now, Fiverr has a fighting chance to fend off the competition.