Last May, Facebook announced that they were launching their platform for any developer to build applications on top of the Facebook social network. The opportunity was too big to give up and almost immediately, Facebook had an onslaught of 60,000 developers all trying to get a piece of the action. A few developers became overnight millionaires leaving others to continue their search for gold.
Almost a year later, many developers still haven’t found their gold and Facebook is still left trying to figure out how they are going to begin making serious cash flow that justifies their $15 billion valuation. It appears that LinkedIn may have taken advantage of the shadow cast by Facebook as the press and blogosphere buzzed about everything Facebook (myself included).
I at one point went so far as to suggest that LinkedIn would soon see its end as Facebook took up its role as the social network of choice for professionals. Boy was I wrong! As I wrote last week, LinkedIn’s growth has surpassed Facebook. Not only did their growth surpass Facebook but according to Alley Insider, LinkedIn is also earning CPMs as high as $75.
Whether or not the numbers are true, LinkedIn has figured out a way to capitalize on their highly valuable user base. I would suggest that they are about to further this with the launch of their application platform. A few months back they announced a few launch partners including Salesforce.com, but stated that even at its full capacity, platform developers would be limited as well as applications.
Get ready to see applications that provided extended utility with mobile phone integration, applications that promote high end goods and services (AMEX, Ritz Carlton, etc) and apps that help your overall experience on LinkedIn a better one. While they will never be as large as Facebook or Myspace, they have no need to be. They can always point at Facebook and Myspace and argue that those two platforms are for games whereas LinkedIn is for business.
There’s no way around this and businesses are also taking note. Different platforms work for different demographics and while Facebook would like to have the largest mapping of the social graph, the reality is that business connections are still taking place on LinkedIn. As long as LinkedIn can keep their platform strictly for business and can maintain their select demographic profile, they will continue to produce more value per user on the site.
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I don't know if LinkedIn is up to the task. But it sure would be nice if the primary orientation of a social network was to map capacities of my network -- quickly and with really creative and functional search tools -- rather than to be excited about, instead, the number of connections I have and possible access to folk. I’m less interested in the Roladex (yawn) and more interested in the map of capacities.
That’s my two yuan.
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All very good points - one thing I think is different is with LinkedIn we may be seeing the growth of just exploring connections and making them. However once a connection is made what else do you do on LinkedIn. I have a LinkedIn account and every so often a business colleague links to me - however other than being a big Rolodex - what else does it provide? I am sure that LinkedIn has a lot more value to others but to me it is one step away from and LDAP service.
Also I think if Facebook could get their act together and build a decent Ad server they would be seriously laughing all the way to the bank. Facebook is an awesome opportunity for CPC advertising, (speaking from recent and ongoing experience), all they need now is to hire some Googlers away from the Adwords team and they could make some serious cash.
Good post Nick.
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