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LinkedIn: The Future
By: Katarina Begonja

Table of Contents

Executive Summary...............................................1

Case Facts..............................................................2,3

Case Analysis.........................................................4,5,6

Recommendations.................................................7

Work Cited...............................................................8

Executive Summary

Future of LinkedIn. Becoming more like Facebook.

Despite being widely recognized as the undisputed champion of the professional networking industry, LinkedIn has made several recent changes to become more like the competition, most notably, Facebook. In an effort to attract daily users, LinkedIn has added many new features, such as, notifications and photo/video sharing. All of these features have long been available on Facebook. In addition to aiming for a similar user experience, LinkedIn also appears to be following in the footsteps of Facebook in regards to generating revenue. As users increasingly access these social networks via their mobile phone, LinkedIn has revamped their mobile app to include advertising.

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Case Facts:

-Updated version of their mobile app was launched in April. For the first time, it will have ads on the app, to generate revenue for LinkedIn. The CEO recognizes the task of pulling this off is a tricky one, b/c you don't want to clutter users with ads in the precious limited space you have when viewing a mobile app (not as spacious as a tablet or desktop view).

-They hope the new additional features will bring users to the site frequently, rather than just when they are looking for a job. trying to evolve into a site people check daily.

-Mobile usage of LinkedIn has grown rapidly. last year 15% of unique visitors checked via mobile, that has increased to 27% this year.

-As of now, ad sales only generate less than 1/3 of the company's revenue, but they see this as an opportunity rather than an issue. with mobile usage increasing, and mobile advertising for LinkedIn non existent until now, they believe this is a huge untapped market to cash in on 2
-LinkedIn has added popular social media features such as: ability to like something, comment, add pictures, upload videos (becoming more like Facebook, and other social sites).

-LinkedIn is finding ways to integrate the social aspect with a professional touch ... users can upload presentations of their way to display their individuality in a more professional way.

-LinkedIn seems to have smartened up, and realized that while their site is incredibly popular, they can still borrow successful features from other social sites to improve the user experience and user retention. The more time people spend on the site/app, the more LinkedIn can charge advertisers to place ads on their app.

-Recently LinkedIn launched a new tool called LinkedIn Contacts that aggregates contact information from a user's email, calendar and address book. It looks like the site is making an effort become something of a contact database for its users.

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Case Analysis: LinkedIn focuses on professional information, encouraging users to construct profiles and establish “connections.” Profiles are used to bestrictly professional, with little or no information about hobbies, political or religious affiliations, favorite music, books or movies included. Now that has changed and LinkedIn is becoming more like the social networking site Facebook. People can solicit and make available recommendations from other members and control how much of their profile to show to the public and to other connections. A core notion is that members can explore the direct connections of their connections. More distant LI members can be approached via an introduction forwarded through the shortest chain of intermediaries. Paying members can search for LI members meeting certain occupational or other characteristics, which is particularly useful for recruiters or consultants. LinkedIn also provides an elegant solution to a social dilemma. People meet at a social event at a trade show, conference, or professional meeting, have an interesting conversation, and exchange business cards. Now back at work, they see your card and want to stay in touch. Once filed, a card may well remain untouched. Sending an email feels imposing; it seems to demand a reply, whereas you may have forgotten our conversation. Such emails are rarely sent and cards stack up in drawers. With LinkedIn one can send an invitation to connect which you can accept with a couple clicks, no imposition. 4

LinkedIn definitely targets young professionals mainly current or recent students. Many young people change jobs and addresses relatively frequently. LinkedIn serves as a self-updating address book. Furthermore, it is an address book that you own. When you change jobs, you must make an effort not to lose contacts that are on a work computer. It also targets recruiters and job seekers for consultants or venders.

There is also a fine line between work time and leisure time. When is it ok to be “socially networking” ? Some companies say it is acceptable to be socially networking during work as opposed to be doing it leisurely on your couch at home. Many companies are now allowing more social networking during work time, especially LinkedIn for recruiting purposes.

LinkedIn’s biggest competitor is Facebook. Facebook is the world’s leading networking site. They also have a big business in advertising. The company said that 23% of its advertising revenue came from mobile ads. LinkedIn now has started their advertising on their smartphone app. Although Facebook’s big bulk of their business is their advertising LinkedIn should be aware that it is much different to be looking at an advertisement on a smartphone and to be looking at an advertisement on a computer screen. 5 Advertisements on a smartphone will get brushed off to the side as opposed to seeing them on a bigger screen where it can potentially catch your eye. Although this is can be a downfall, LinkedIn is facing the same trends as Facebook. In their fourth quarter, 27% of its traffic came from mobile users, up from15% a year ago! A more valid comparison may therefore be for the fourth quarter, when LinkedIn earned $11.5 million, or 10 cents a share. Facebook, meanwhile, had net income of $64 million, or 3 cents a share, off a much-larger revenue base. One reason LinkedIn is generating a higher percentage of net profit for shareholders is that it's issued a much smaller number of shares than Facebook.

LinkeIn seems to be finishing its growth stage and heading toward the maturity stage. It is definitely more popular now then it was only a couple of years ago. Now that it has introduced an app for smartphones and includes advertising it shows consumers they are just as good as their competitors if not better. They offer a little more than Facebook when it comes to being professional. It is based more on a business platform but now with its new updates is a mix of Facebook.

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Recommendations:

LinkedIn is going in a great direction. The goal is to attract users to the site on a daily basis, so they are replicating features from other social networking sites who have already established an active daily user. The one thing I would recommend is limiting how many videos can be uploaded. They need to maintain their focus of being a “professional” networking site as opposed to Facebook which is more of a social site.

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Work Cited:

"Product Life Cycle." NKU Home: Northern Kentucky University, Greater Cincinnati Region. N.p., n.d. Web. 9 May 2013. .

Shinal, John. "Shinal: LinkedIn's diverse revenue stream is its strength." USA TODAY: Latest World and US News - USATODAY.com. N.p., n.d. Web. 9 May 2013. .

Skeels, Meredith, and Jonathan Grudin. "When Social Networks Cross Boundaries." LinkedIn: A Case Study. N.p., n.d. Web. 8 May 2013. .

Walker, Orville C.. Marketing strategy: a decision-focused approach. 5th ed. Boston: McGraw-Hill Irvin, 2006. Print.
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