This year, Oliver Williamson, who teaches at UC Berkeley, was co-recipient of the Nobel Prize in Economics (he shared the prize with Elinor Ostrom).

Admittedly, the official explanation by the Nobel Committee is hard for a layman to understand. He is being honored “for his analysis of economic governance, especially the boundaries of the firm”.

You also may be wondering what all of this has to do with XING. Quite frankly, a lot. Oliver Williamson is particularly famous for his concept of “transaction costs”, meaning costs associated with doing business with suppliers. These include costs for searching for the right partner, costs for making the initial contact, negotiation expenses, and also costs connected with a contract signing. (more…)

I have spoken on various occasions over the last few weeks about our areas of focus and our targets as a company. Just by way of a reminder: our absolute key goal is to create added value for our members – by providing them with new features and applications that help them to work and network even more effectively using XING. We’re making fast progress here, having launched a more than steady stream of new features over recent weeks: from Company Profiles to the “Members you may know” feed, and the first OpenSocial apps “Ask XING” and “XING News”. We’ve stepped up our rate of innovation considerably – and look forward to receiving feedback from as many of you as possible. But that was just the beginning! We’re continuing our innovation offensive and I look forward being able to tell you more about it very soon – with regular posts in our blog. (more…)

43% higher revenue and 29% higher EBITDA in comparison to last year’s Q1: we can be proud of the quarterly results we’ve just published. Even in the midst of a global financial crisis, XING continues to grow very profitably. We’ve strengthened our market position, while at the same time making strategic decisions for future growth. I’d like to give my deepest thanks to all our employees for their hard work in recent months.

I’m especially happy that we’ve really stepped up our speed of innovation. We introduced a new feed on the home page – “Members you may know” – which has been very popular with members. Now with the successful launch of OpenSocial applications, we’ve laid the technical foundation for providing our members with relevant features developed by third-party developers. By doing so, we’ve started setting our strategic course for increasing the viral growth of our community in order to ensure profitable growth in the future. (more…)

Today we published our detailed results for the past financial year. 2008 was an extremely successful 12 months for us – a year which saw our revenues increase by 80% to 35 million euros ($48.5 million), generating a profit in excess of 7 million euros ($9.7 million). This is something the whole team here at XING can be extremely proud of! For all details please refer to the full press release and our 2008 Annual Report – also have a look at Reuters reporting about us.

I’ve been at XING for a good two months now. The busy last few weeks have flown by and I have had the opportunity to gain a much deeper insight into the factors that make XING so successful. I have spent most of this time getting to know my colleagues, talking directly to members, immersing myself in all aspects of our business and setting out clear areas of focus for the upcoming quarters together with my team. (more…)

If you have missed him live at CeBIT on Wednesday: Here you can watch Stefan Groß-Selbeck’s keynote speech about “Business Networking @ XING” on video.

Today is my first day as the new CEO of XING AG and I therefore wanted to take some moments to briefly introduce myself here on our Blog as well. I’m 41 years young, married and have two children. I arrive at XING from eBay, where I’ve held various different positions since 2002. For the past four years I have overseen business operations as General Manager of eBay Deutschland.
Since my appointment was announced several weeks ago, I have been overwhelmed with the kind and positive words I’ve received from so many people. This news was also accompanied by a pleasing side effect: I have more than tripled my number of personal contacts literally overnight. I couldn’t have wished for a better reception and I already feel very much at home after such a warm welcome.

It has long been clear to me, as a member in the past, what it is that makes XING different from similar platforms: Our members form a business community that really is uniquely active. They bring new momentum to professional networking on a daily basis with their many thousands of events, group postings and messages. A central task of mine as the new CEO will be to further develop and expand this unique community. Now I have finally started and I’m very much looking forward to getting to know all of my new colleagues in person. Lars Hinrichs has built up something with his team here in Hamburg that enjoys the utmost respect throughout the global Internet sector. Back in 2003 when almost all online businesses were teetering at crisis point and dozens of ambitious plans had failed, he came up with a new business idea and launched it online just a few weeks later. This alone is testimony to his entrepreneurial spirit and enterprise, more than ably assisted by his enthusiastic team.

The last five years have seen this start-up evolve into a highly successful and globally operational company. We already employ 192 employees in Hamburg, Barcelona, Istanbul and Beijing at present, and all the signs indicate that there is ample potential for further growth – especially in view of the current economic climate.
This places us in a very promising position and, for me, the exciting challenge now lies ahead of making our community the most active worldwide in more and more regions around the globe together with the whole team. We intend to drive the expansion of the platform further forward, integrating new features and functionality along the way. I am, of course, also reliant on your support in our endeavors to make XING even more valuable to you as members. I therefore welcome all your feedback – both positive and negative. I’m extremely keen to ensure a direct exchange with you, and for an online community like ours a Blog is of course a very fitting way to achieve this. I will be keeping you continually updated here on all the latest developments at XING, along with the rest of our 6.5 million plus members based in more than 200 different countries and not forgetting our shareholders. Please therefore stop by here regularly to catch up on our news, or simply subscribe to the RSS feed for the Blog.

As well as my regular posts here in this CEO Corner, I also look forward to communicating with members and reading their posts both in the XING Group and the Moderation Group. I reserve particular respect for the 34,000 moderators who have demonstrated such sterling self-initiative in building up more than 21,000 wonderful groups on the platform. My colleagues in the Community Management department will continue to moderate the group on an active and daily basis. Your input and feedback is nevertheless of great interest to me and I will be sure to keep you informed on particularly important issues.

It´s a deal! We’ve just announced the purchase of NY-based socialmedian Inc., a leading innovator in the online news industry. For XING it´s a huge technological jump as it enables the integration of business news into our network.

Why do we think that socialmedian is a perfect fit for XING? Here´s why: In business success depends on access to the right information at the right time. Both the speed of information and the sheer volume of data have increased rapidly due to the rise of the internet. Traditional media companies, social media such as blogs, tweets, videos and other user-generated websites now provide daily news, leading to a veritable flood of information. The consequence: Time-strapped professionals are forced to parse through numerous news sources for relevant information and sort, organize, and share stories on their own.

Jason Goldberg, new VP XING Applications Platform

Thanks to socialmedian you can save the little time you have. Socialmedian gathers information from about 19,000 sources, including social media services such as Digg, Delicious, Twitter, Flickr, YouTube, Google Reader and many, many more. Socialmedian then filters your news through your social networking contacts. That means you get the news you´re looking for, the news that fit your interests and your passions. And it doesn´t stop there: Due to it´s intelligent custom filter technology socialmedian isn´t just for the individual member. Just think of all the ways it can help boost business for your groups, your events as well as for the company you work for.

On top of this great news Jason Goldberg, socialmedian´s founder and CEO, is going to join us at our headquarters in Hamburg. Jason is a pioneer in the Internet business, he founded the career development website Jobster in 2004 and headed the company as CEO. Now in his new role of VP XING Applications Platform Jason will be responsible for managing global partnerships for application developers and content providers to connect with our XING network.

We cannot wait for Jason to join our team and see how the innovative socialmedian technology becomes an integral part of XING! A big thanks to the deal team: Burkhard, Jackson, Johannes & Julian and everybody else who supported in this process.

After five exciting and successful years, I’ve decided to dedicate more of my time outside of my commitment to XING to new entrepreneurial challenges.

The company has long since grown from a startup to one of the leading players in social networking worldwide. We were successful from the beginning, despite the voices of the critics. In 2003, we kept going and listened to those who relied on us to help more effectively manage their professional lives, and who continue to do so after five years. Working together in recent years, we have created structures to maintain the scalable and profitable growth.

By appointing Stefan as my successor (he currently heads eBay Germany), I’ve found a very successful and extremely Internet-savvy manager to lead XING. Now I’m able to concentrate once again on that which matters to me as an entrepreneur: developing new ideas and giving them life by means of entrepreneurial spirit. In the future, I will continue to advise XING as a member of the Supervisory Board. I am also the largest shareholder in the company, and intend on remaining so.

I would like to give special thanks to our over 170 hardworking and experienced employees from over 26 countries, many of which have become friends of mine. I’d also like to thank all our members – all of whom have made XING into that which it is today. Without the commitment of all those involved, XING would never have become the European leader for business networking with over 6.5 million members in such a short period of time.

I am certain that XING will continue its rapid development with Stefan, and I’m already looking forward to seeing the moment in which the new features we’ve been developing in the past months are launched one by one on the platform.

Let’s start a new chapter in the history of XING together. You as members can write a piece of Internet history, along with XING, Stefan and his team.

Despite the difficult economic times, XING AG has continuously expanded its growth in the course of the third quarter 2008 yet another record quarter. We’re an example of the opportunities present in every crisis: crisis accelerates change, and this is good.
In these uncertain times, our members rely even more on their professional contacts. If your company lays you off or does cost cutting, you start to see right away how valuable social networks can be. At XING, we concentrate on offering our members a wide range of opportunities and tools for expanding their professional network. In short, we help people increase value particularly in difficult economic periods. Professional networks are not a fad; they’re here to stay. And now is the time to make the most of your network.
Our business model is rather simple: Expanding numbers of members are resulting in higher revenues and contributions to earnings in all three service categories (B2C, B2C and Advertising). This demonstrates that XING is one of the winners of this development. At XING we can realy speak about profits and tax rates we have to pay. Much better feeling than just to speak about higher revenues.

Since the IPO in December 2006, our numbers of our members have risen every quarter, thus driving up our revenues and results. Apart from the growth in revenues, XING AG is one of the small number of listed companies which combine such rapid revenue growth with an above-average profitability (our last quarter was at 40%). In these terms, XING AG is one of the most profitable companies on the German markets.

The unique success and the continuing strong growth of XING are attributable particularly to highly motivated and experienced employees – actually the best team I have ever been privileged to work with. Their commitment is our most sustainably productive capital. And, since the beginning of the year, we have recruited a further 52 employees in order to enable us to continue to successfully implement the growth strategy which we have initiated. We are not laying people off, we haven’t stopped hiring, or even slowing down the recruitment processs. Indeed, the reverse is true: we have over 40 open positions at present. As an entrepreneur I strongly believe that these times are excellent opportunities, and XING is ready to tackle them.
The new employees will help develop new ideas and business models, and provide XING with strong support for the successful implementation of numerous new projects which provide our members with additional added value for business networking.

Tomorrow it will be five years ago to the day that our platform first went online. And what a five years it has been! The network began life with 472 contacts – all friends and associates of mine. Back then I would never have dreamt that these humble beginnings would turn into the platform we are today so fast: Just five years of busy networking later, we’ve grown into the European market leader and count more than 6.5 million people worldwide amongst our members. And with more than 500,000 members who choose to pay for our comprehensive Premium services, we rank no. 1 in the world as the network with the most paying customers.

We look back on many eventful and exciting moments, when our ever-growing team only not only pulled off the relaunch of the platform and change of name, but also managed to acquire and successful migrate no less than three business networks to the platform.

The last five years – all 1827 days – have seen us welcome a continuous stream of new members as the network expands on a global scale. But this period is also marked by ongoing innovation and enhancement: In the last year alone we made 50 releases and introduced 30 major new features. The fact that our ideas and features are copied time and again by others confirms this pioneering status to us. And more than half of all these innovations have been made in response to the valuable input we receive from XING members!

There are enough moments and milestones since our launch to write a book, but in this limited space I’d like to sum up just some of the highlights …

Zero hour – We go live: The platform was officially launched on 1 November 2003 under the name openBC. And by the end of day 1 our numbers had already grown to 1,000 members – a promising sign for us! Way back then just seven people made up our small virtual team: Michael, Heiner, Norbert, Hanno, Bill and Daniela. And the grand company headquarters was my front room at home! The connection path algorithm was developed on an ancient Linux 486 PC – it was already pretty old back then but this was a deliberate move: Using the slowest testing computer we could get our hands on meant we were better able to test and optimize the system speed. These days we manage more than 120 million peer-to-peer connections between our members and my living room has returned to being a family-only domain. We started selling Premium Memberships from the very first day, after just 90 days we were cash-flow positive, and time has shown that our business model is a successful one for the long term.

The Groups are born: By the Christmas of 2003 we launched groups on the platform, known back at the beginning as “networks”. Fast-forward to the present and we have an incredible 20,000 groups on XING where thousands of members interact with and benefit from one another every single day.

Online meets offline: The dawning of Events was heralded when the Munich community, headed by the now Ambassador Martin Bockelmann, began meeting up once a month offline. The official Event feature then followed in February 2004 and XING members now organize thousands of events around the world using our platform. More than 35,000 in fact in the first half-year of 2008 alone!

Unparalleled multilingualism: Recognizing the potential of the global digital world early on, we acted on this and began introducing more and more languages. As of 2005, XING has been available in 16 languages. This makes us the first and to date only online business platform to lay the linguistic foundations for truly global networking without borders.

Private Clubs: Urged on by a number of companies, we developed a customizable white label solution of our software and started distribution from July 2005 onwards. We realized though that this wasn’t completely in tune with our members’ interests and that continuing down this road would not be successful in the long term. Since then we have driven forward the expansion of our popular Groups functionality and introduced Enterprise Groups as a new home for companies on XING.

1 million members and counting!: An exciting moment came at the beginning of 2006, when the number of XING members reached seven figures for the first time. This rapid growth involved the continuous expansion of our IT resources – and our scalable software made sure that this surge in users went almost unnoticed (for the odd downtimes that occurred every now and again we apologize once again). We now have almost 200 servers in two different data processing centers.

openBC becomes XING: In September 2006 we announced that we were changing our name and relaunching the entire platform. “XING” simply better reflects the platform we are today: A global community that unites more than 190 nationalities. We had outgrown the name openBC: Too many “BC” imitators had sprung up, many people interpreted “open” as being insecure and “BC” also had associations as the abbreviation “Before Christ”… The name XING is so appropriate because it is understood in many different cultures. And there’s more than one possible way to pronounce it: Most Germans would say “Ksing”, while the Americans would most probably say “Crossing” like their road signs, the Spaniards “Zing” and the Turks “Ssing”, etc. We came up with the name by the way back in 2004, but it took us some time to secure the international rights.

The Relaunch itself: November 2006 saw the relaunch of the completely reworked platform. The XING era heralded not only a new name but also a new logo, a fresh brand-new look and a much simpler, more user-friendly navigation.

IPO becomes reality: Just one month later in December 2006, XING AG became the first Web 2.0 company to go public. This stands us in excellent stead to withstand any financial crises that come our way: We are free of debt and have a full war chest – the best prerequisites for remaining independent and continuing on our course of expansion, even in the current financial climate on the markets.

We love rails: At the start of 2007 we kick-started the internal development of Rails projects. This is the perfect framework for supporting our agile, test-driven development and is ideally suited to our technical remit of a database-driven Web front-end. Rails has accelerated our development speed. We’ve already implemented Marketplace and BestOffers using Rails and are more than pleased with the results. This way we support the rails community and remain as innovative as ever.

XING hits Spain: In March 2007, XING acquired eConozco, one of the leading Spanish contact networks for business professionals. And then in June 2007 Neurona, the largest business network in Spain and Latin America, joined the XING family, making XING the market leader in Spain. This opened up the XING community overnight to hundreds of thousands of new additional business contacts in the fast-growing Spanish-speaking world.

XING Marketplace is launched in May 2007, marking a world-first with the integration of a job website’s functionality with all the benefits of an international business network. Our billing model is 100 % performance-based, like the new B2B offers we will be launching over the coming months.

XING Mobile hits the market: A completely reworked mobile version of the platform went live in August 2007. Originally launched in 2005, XING was the first provider to offer business networking with contacts on the go – and the relaunch of our mobile portal reinforced once again our status as technical pioneers in the field of mobile networking. XING for the iPhone was then launched in time for the start of iPhone sales in Germany in November 2007, and a native iPhone and Blackberry application is coming soon. Watch this space!

OpenSocial: In November 2007, XING AG became one of the first launch partners to join the open programming standard OpenSocial. Since then we’ve been busy testing in our OpenSocial SandBox. Our clear aim here is to ensure that there’s a clear added value for our members and that their data remains fully protected as well.

Turkey, here we come!: XING entered the Turkish market in January 2008, becoming the clear market leader for business professionals with the acquisition of the business network cember.net. Our Turkish members seem to have felt right at home on XING from the start, and the Turkish-speaking groups are already the second-most active, right behind the German groups!

So much more has happened over the last five years that I can’t leave unmentioned, so I will at least list the links here: Our joint venture in China, the Premium standard for all groups, the introduction of our BestOffer program for members, and this year alone the visualization of business contacts with Google Maps, the roll-out of official XING Seminars, the list just goes on and on.

Anyone who’s interested in becoming a part of the XING story is very welcome to apply to join our team. In spite of the current crisis on the financial markets, we’re still recruiting on a large scale and currently have more than 30 open positions all listed on our job page. I already have the privilege of working together with 160 talent colleagues from no less than 22 different nations – and together we continue to strive to create the best and most successful tool for the networked business world. It’s worth mentioning that we have been financially successful from the very outset: Growing member numbers have led to a continuous rise in revenues and profits. Our quarterly results since the IPO in Q4 2006 has risen from 3.6 million to 9.2 million euros in the current Q3 2008, while the EBITDA margin has increased during the same period from 23% to 40% at present. Which goes to show that there are business models out there that can be profitable in crises too.

Lots of people have been asking me how we’ll be celebrating our 5th birthday. We are in fact throwing two parties: This week we had a big party and meal with our whole team. And we’ve been giving away presents to members as well over the past days with a number of promotions on the platform. Because one thing is absolutely certain: Without our members and without our team of employees we wouldn’t be where we are today. So I’d like to thank you most sincerely for your loyalty, support and all the life you bring to our fantastic platform. Here’s to the next 5 years!