You might think our scoop today that Microsoft’s LinkedIn plans to enter the gig economy market of connecting businesses with white-collar freelancers would have unnerved investors in Fiverr and Upwork, the two public companies now in that market. Apparently not: Stocks of both rose about 5% on Friday. Perhaps investors see LinkedIn’s potential entry as “validating” the prospects of the two businesses. That’s the nonsensical response Silicon Valley startups often have when big rivals arrive in their market.
The truth is that the arrival of LinkedIn in the market, with its 740 million members, can’t be good for either Fiverr or Upwork. But the real question is why Microsoft is bothering. Based on what Fiverr has reported and Upwork projected, their combined revenue last year was only about $550 million. And that’s despite a very good year: Fiverr on Thursday reported fourth-quarter revenue increased 89% from a year earlier.
