Shares of freelance-services marketplace Fiverr International (NYSE:FVRR) tumbled today to close 12.6% lower after multiple media outlets reported that Microsoft (NASDAQ:MSFT) is building a competing service through its LinkedIn subsidiary.
TechRadar, for example, notes today that a new "LinkedIn Marketplaces" service will help companies on its network "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 who should be able to use the new service to market their skills to employers on a temporary basis. LinkedIn spokeswoman Suzi Owens is quoted confirming that freelancers will be able to apply for gigs "directly through your LinkedIn profile."
Simultaneously, Techradar reports that LinkedIn is working to create a "digital wallet" service through which employers can pay, and freelancers can collect payment, for services performed via the Marketplace.
Microsoft's success at this venture is far from assured. But it sure sounds like the company is serious about competing with Fiverr. The fact that the freelance marketplace has nearly quadrupled its revenues in just three years probably made Microsoft's move inevitable, though. When one company spots an opportunity and shows that it is attractive, it's 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 achieved free-cash-flow-positive status (reached last year) before moving to compete with it. At least now, Fiverr has a fighting chance to fend off the competition.