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Hal Licino

LinkedIn’s Business-Only Network Becomes Wall Street’s Darling

Aug 13 2012, 04:39 PM by

At first glance, LinkedIn is everything that Facebook is not. It’s not frequented by nearly a billion claimed users, there are precious few posted photos of cute puppies and babies, it doesn’t feature games that suck the lifeblood out of its bleary-eyed social-gaming jonesing addicts, most people have no idea who founded the company or who is the current CEO (Reid Hoffman and Jeff Weiner)… oh, and it’s immensely profitable. Every hour a user spends on the site lands over twenty times as much money in LinkedIn’s coffers than an equivalent hour results in income over at Mr. Zuckerberg’s social network. While Facebook has lost half of the share price it had during its Initial Public Offering (IPO), leading Wall Street to refer to the FB stock as Faceplant, LinkedIn has since doubled its IPO price. The secret to LinkedIn’s success is also its raison d’etre: While Facebook is the social network, LinkedIn is the business network.
LinkedIn Is the Social Network for Furthering Business Goals
Comparing the two networks is a bit like the prototypical comparison of apples vs. oranges, or Apple vs. Microsoft. Yes, they both allow users to connect with each other, but the driving force behind LinkedIn is strictly the onus to make connections with other executives in order to further your business goals, not to keep up with the lives of people you haven’t seen since high school while trying desperately to get a building permit to construct the 437th building on your CityVille site.
LinkedIn’s 3 Critical Advantages over Other Social Networks
The key to LinkedIn’s success is “strictly business.” According to a recent article on Forbes, the business aspect of the social network leads to three marked advantages in LinkedIn’s monetization strategy:
  1. Recency – While the profiles of the strictly social network users of Facebook will change like their roiling preferences for this band or that movie, the profiles of LinkedIn users are far more graven in stone. Professionals don’t change their essential career descriptions even when they do change jobs, so a Macau junket operator is fairly likely to stay in that job description no matter even if they’re hired away to work in Vegas.

  2. Authenticity – Due to the fluidity of social networks, Facebook embodies the old cartoon about “no one knowing what kind of dog you are on the internet,” so there is literally no way to determine whether a particular user is who they are or have the job or credentials they say they do. Even with Facebook’s recent focus on users applying their real names on the site (which is ridiculously easy to circumvent), there is still no assurance that the individual really is a “Harvard summa cum laude currently Sr. VP at a Fortune 500 Corporation” as they may claim. On LinkedIn, the profile is the basis of business relationships and unless someone is an extremely skilled criminal scammer, they have to represent themselves at least fairly accurately on their profiles.

  3. Standardization – The key difference in this respect between the two networks is that while Facebook users tend to identify themselves through highly esoteric interests in media, concepts, advocacies, hobbies, personal interests and which way the wind is blowing, the profile data on LinkedIn tends to be much more “meat and potatoes” with hard information on the user’s background, education, demographics and career path. This availability of solid personal data is considered a goldmine to savvy online marketers.
LinkedIn Users Are on the Site to Make Money
While Facebook may be the social network for everyone with all of the pros and cons that description entails, LinkedIn can be seen as the social network for the people of the world who are interested in making money, and that aspect automatically places it in a completely different category for monetization and profit. By focusing on enterprise-targeted and pricy offerings such as LinkedIn Recruiter (at up to $7,000) the business social network has shown that it shares its users’ commitment to making money, and unlike the much flashier and more horizontal social networks, is very successful at the task.

Posted in Tips & Resources, Social Media

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