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Summary:

Now that Thanksgiving is over, it’s time to start speculating about what will be hot and what will be not in 2008. After all, 2007 was not the Year of the Widget, despite what Newsweek predicted. If anything, it was the Year of Facebook. But what about that business networking contender, LinkedIn? Could 2008 be the year of business networking?

Now that Thanksgiving is over, it’s time to start speculating about what will be hot and what will be not in 2008. After all, 2007 was not the Year of the Widget, despite what Newsweek predicted. If anything, it was the Year of Facebook, as the social networking site won a $240 million investment from Microsoft for a mere 1.6 percent stake (plus the right to sell third-party ads on the Facebook network), valuing it a some $15 billion. But what about that business networking contender, LinkedIn? Could 2008 be the year of business networking?

Maybe — but only if LinkedIn doesn’t fumble its position by failing to address the worldwide Internet user base, about 80 percent of which resides outside of the U.S.

LinkedIn seems to have built some momentum while everyone was gawking at Facebook. LinkedIn CEO Dan Nye predicts the company’s revenues could grow to $100 million next year. News Corp. (apparently) wants to buy it. And on a year-over-year percentage basis, as of October, LinkedIn grew faster than Facebook.

Facebook’s sober cousin seems well-positioned for any economic weakness that could emerge in 2008, because it doesn’t depend primarily on advertising, but rather makes money by selling premium services to subscribers and their employers. And if people start losing their jobs, they’ll be all the more interested in LinkedIn’s services.

LinkedIn faces challenges, of course. I spoke with Konstantin Guericke, LinkedIn co-founder and Jaxtr CEO, not as an official spokesperson for LinkedIn but as an interested observer and investor. He said that English-only LinkedIn needs to push forward aggressively with internationalization and localization in 2008. It competes with Xing in Germany and Viadeo in France, both of which support multiple languages.

From an international perspective, Facebook doesn’t look so exciting. It competes with a vast array of social networks including hi5, Bebo, Orkut, Mixi, QQ and more. Besides that, it could have permanently offended many of its users with its ham-handed attempts at social advertising. For LinkedIn, advertising is a source of revenue secondary to providing services its users find valuable enough to pay for. On that basis alone, I hope that 2008 is the year of LinkedIn rather than Facebook, at least if we’re talking about networking online in one forum or another.

  1. Whether Facebook, LinkedIn, or a conversation across the table at Starbucks–the key to mutually beneficial networking is mutual trust and a genuine knowledge of the people in one’s web of relationships. When someone I’ve never met contacts me on LinkedIn saying they are a colleague from a former employer and they want access to my network, I don’t jumpt at the opportunity. Quantity and quality don’t usually multiply at the same rate. When one appears to be collecing names on LinkedIn like boy scout merit badges, the power of the tool begins to lose its effectiveness.

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  2. Anne,

    I personally find LinkedIn a much more valuable resource than LinkedIn for the very reason that you point out – business. In my view, Facebook is overhyped to the point that it seems “glamorous”.

    An old media comparison would be Rolling Stone magazine(Facebook) versus the Wall Street Journal (LinkedIn). Rolling Stone is a good business with staying power whereas the Wall Street Journal is an institutional resource for the business and investment community worldwide. Obviously, the Journal is a GREAT business.

    Imagine News Corporation buying LinkedIn and integrating it with the Wall Street Journal online. Nice combo – count me in. :-)

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  3. I made a typo, I meant to write that I find LinkedIn a much more valuable resource than Facebook. Sorry for the error!

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  4. LinkedIn really needs to do something with this social network it has gathered. Right now it just feels like a glorified Rolodex and resume holder. They have huge potential to become the de facto business portal and they’re squandering it on features of marginal concern to their existing user base like internationalization. Build some depth! Give me some reason to come back to LinkedIn beyond occasionally accepting some new FOAF as a contact. There’s a whole world of features that could be incorporated: blogging, groups, industry pages, integration with business news feeds and job listings from other websites.

    People maintain separate personal and professional networks in real life, I don’t see why LinkedIn couldn’t adapt more of the rich features of Facebook tuned to professionals.

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  5. LinkediN deserves accolades , as it is robust, concise and no-nonsense system!

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  6. I’m looking forward to LinkedIn’s continued success. The early adopters are now pulling in a crowd.

    And yes – my belief is that the system works best when individuals connect to those they know and trust. It isn’t a game to make the most connections. People that don’t trust you won’t connect you to their close VIPs; you won’t connect people you can’t vouch for to your own VIPs.

    As users understand the tool better, they get more out of it.

    steve

    Steven Tylock
    Author of the LinkedIn Personal Trainer

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  7. Patrick,

    Because LinkedIn’s paying crowd are mostly older, it is not easy to implement new features. That is why LinkedIn has been lacking in features and functionalities to integrate social networking. There are new sites such as Nethooks that are taking advantage of the gap in features and social on LinkedIn and attracting much younger crowd. It is going to be an interesting year for business networking. Althought I am not that impressed with LinkedIn’s decision to sell to News Corp. Hope it does not become MySpace of Business Networking.

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  8. LinkedIn has great potential, however at the moment its overrun by recruiters (whose value add I’ve yet to comprehend).

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  9. Anne, great article. Though LinkedIn does not rely on advertising as its only revenue stream, I wouldn’t be surprised if in a year or two, it becomes its biggest source. Nielsen Media Research/@Plan survey data shows that LinkedIn’s audience ranks #1 for composition of users with HHI of $150K+, in addition to users who own smart phones, as well as travel for business.

    Their more “professional” audience (armed with high buying power) easily warrants higher CPMs than that of facebook or MySpace, which will presumably translate into bigger revenue. Adding revenues derived from premium services, $100 million per year actually doesn’t seem so far fetched.

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  10. In LinkedIn, everything centers around establishing a connection. In Facebook, connecting is just the beginning. Facebook is all about community. And this can been seen by doing things like leaving messages on users’ walls, joining groups and having discussions, as well as some of the more social applications built for Facebook.

    Linkedin will have to slog their way through to be the best! and i doubt if they can pull in something new that other social networking sites doesn’t carry.Good Luck!!

    Parul
    http://www.bhopu.com

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