Linkedin now valued at $1Bn – what can other social networking sites learn from them? – published 2008
I read with interest in the Financial Times on Wednesday that Linkedin.com, the business networking site is now valued at more than $1Bn following some recent investment from Bain Capital.
The article contrasts the $15bn valuation for Facebook implied by a Microsoft investment of $240m last year and the $580m News Corp paid for the parent company of MySpace, then with 17m members in the US.
Linkedin is constantly held up as the darling of the “business networking” set, and for good reason. The membership has been steadily growing over the last 4 years and is now around the 23 million member mark.
But why does it work, and how can the “social” networking sites learn from the success of Linkedin?
First of all, Linkedin is only for business users. It doesn’t stop anyone signing up and adding their details, nut the culture, language and tone of the site is very commercial. I have seen few examples of fake profiles, or strange profile photos in my 4+ years of using the site.
Secondly, Linkedin users want to be found. This means that they keep their professional profile updated. In my job as head of Business Development, if I want to locate a peer in another company, I turn first to Linkedin because I know that other CXO, VP, Business Development types will also be on Linkedin.
Linkedin started monetizing the site some time ago with banner ads (you can choose to have run of site ads displayed or targeted ads), and they also sell expensive packages to recruiters who use it to source candidates.
Linkedin have a “what are you doing” feature – but as I already (periodically) update this on my Facebook account, and I regularly twitter – why should I have to update a 3rd presence indicator manually?
My own use of Linkedin has changed over the years. I very rarely pass on invitations from people 2 or 3 people removed (and never from recruiters – they should earn their fee!). Instead, knowing the name and company of the person I am looking for, I can usually find their email address in a few seconds via Google. Knowing they “want to be found”, an unsolicited email is normally welcome.
On my first business development trip to London, I used Linkedin extensively to find prospective partners and clients, and used the site to set up meetings from Sydney before setting foot on the plane.
My first experience of Linkedin was back in 2004, in Sydney. My boss at the time sent me a link to join his network (these days this is happening with Facebook), and I accepted – not quite knowing what the site was about. Upon closer inspection, I saw that you could upload your contacts and see who else was “linked in”. I did this and found that 32 of my existing contacts were using thesite – and these were the sort of people who I had expected would be using such a tool. Four years, and 2,100 connections later it has become one of my most popular sites, and I have connected with, met and done deals with many of the people I am connected to on Linkedin.
So what are the lessons for the other sites?
As Linkedin is aimed directly at business people, it is hard to draw direct comparisons, as the sites are very different. For a start, the average Linkedin user is 41 (makes me just under the average at 39).
- Give the users as much choice as they need. Choice in adding profiles, information, connecting (and not) connecting with others and display of ads etc.
- Allow ways to integrate into other sites. Don’t be another twitter – but allow relevant presence information to be made available to other sites.
- Allow portability. I use Linkedin as my number 1 networking tool and I don’t have any plans in importing all my contacts into Facebook – but perhaps I’d like to wash my Linkedin list against my Facebooklists to see who’s also on Facebook. Some sites allow this already, and we need to see more transparency with how information can flow around the networks.
- Make it mobile! I want to take my network with me when out and about. Facebook and a number of others have 1st generation mobile sites (eg m.facebook.com), but the Linkedin version is very limited. I should be able to see and accept invitations on the move.
- Display relevant ads. Especially in the case of Linkedin, I have a very complete profile. They know all about me – my interests, where I live, where I have worked etc – so show me relevant ads! The social networks are getting there but please Facebook, no more refinancing ads and I don’t want a sky+ box!
Linkedin has been doing the “business networking” thing right for some time now. The social networking sites have a different purpose, and many users don’t see their membership of such sites as “networking” and would never admit to being a “networker”.
If you would like to join my Linkedin network, send me an email via my Linkedin signup page and I look forward to connecting with you.