SAN FRANCISCO -- This is not the kind of word of mouth LinkedIn was looking for.
Last week, four users filed suit against the professional networking service in San Jose federal court. They accused the company of accessing their email accounts without permission and harvesting the addresses of everyone they have ever emailed in order to send out unwanted invitations to join the service.
The lawsuit, which is seeking unspecified damages, has seen an outpouring of public interest. Many users don't think LinkedIn does a good enough job getting their explicit consent to access that information.
For years LinkedIn has argued that it gets permission from its users to reach out to their contacts. In response to the lawsuit, it has maintained that position. And, in a blog post on Saturday, LinkedIn denied it breaks into or hacks its users' email accounts.
"We do give you the choice to share your email contacts, so you can connect on LinkedIn with other professionals that you know and trust. We will continue to do everything we can to make our communications about how to do this as clear as possible," Blake Lawit, LinkedIn's senior director of litigation wrote.
Yet analysts say LinkedIn may still have a problem.
Like Facebook, it is among the most aggressive of social networking companies in growing through referrals from users. And while it boasts strong growth -- 238 million users around the world at last count -- it also has drawn sharp criticism for the practice.
"All of these companies that are aggressively courting users are always walking that knife's edge, pushing the envelope and risking getting cut by it. It's a very difficult balance," Altimeter Group analyst Charlene Li said.
LinkedIn should take a hard look at how it seeks permission to send emails to users' contacts and make it easier for users to revoke that permission or risk losing the trust of its users, which can damage the brand, Li said.
"It's one thing for LinkedIn to say the lawsuit is without merit, but it should have also said that it was going to look at the user interface and make sure the process is absolutely clear to everybody," she said.
When you sign up for LinkedIn, it prompts you to import email addresses from your account. Once imported, LinkedIn asks permission to contact those people. If you don't want to invite everyone you have ever emailed, you have to uncheck the "select all" button. LinkedIn also hangs on to that information, and prompts you later to add your contacts as connections on LinkedIn.
"Extra care needs to be taken in these gray areas because that's where trust is made and where trust is broken," Li said.
Other analysts say they don't expect the lawsuit to have much of an impact on the company.
"We check a box when we sign up that includes dozens of pages of terms and conditions," said Wedbush Securities analyst Michael Pachter.
"The hard part is proving how we are damaged by this," he continued. "I agree that it's spam, but it's hardly costing anyone a lot of foregone revenue."