LinkedIn is a business network by original design, lately accelerated through a raft of new features that are quickly propelling LinkedIn as the place where business, and in particular business-to-business interactions, take place. And no, I don't have any stock or affiliation with LinkedIn, and I recently upgraded to the business account on my own nickel. In a 2011 Harvard Business Review article, analyst Judith Hurwitz outlines three steps taken by LinkedIn in its original strategy that are now paying dividends.
From a sort of digital Rolodex for business contacts, and a place where business groups were easily created but largely remained inactive (except for spam), LinkedIn is transforming into the place where business goes to connect, meet and converse. Wall Street is noticing. The stock is up about 70% for the year. On November 1, the company reported third-quarter revenue of $282 million (up 81% over the comparable quarter a year ago), while income swung from a year-ago loss to a profit of $2.3 million. Membership is now at 187 million. While the numbers beat the Wall Street estimates, analysts, including those at Seeking Alpha, question whether a slowdown in the number of LinkedIn users will dampen growth.
The business strategic issue of either increasing the number of users or getting more value from the existing user base is very reminiscent of the obstacles and opportunities that have faced all business-to-business media publishers. One of the enduring B2B media lessons is to let the B2C gang chase the big user circulation growth, while B2B needs to build conversation, curation and rich content platforms for users who are smaller in number but bigger in budget. In its transition from a place to park electronic business cards to a media platform, LinkedIn is firmly in the content creation, content aggregation and community building media business.
Consider the changes LinkedIn made in the third quarter:
1. Redesigned the home page to highlight targeted content. I find the content selected by LinkedIn much more relevant than the Techmeme-type content aggregators which tend to highlight the same stories (Apple, Apple, Apple) over and over again. As I wrote this column, I went to Techmeme to see if I was being unfair -- the first four top stories were all Apple.
2. Notifications. You can get a red flag notification on your LinkedIn homepage when someone comments on your shares, becomes part of your network or you get an InMail (LinkedIn's email system). This encourages the user to check in frequently and encourages interaction.
3. Enhanced company pages. This allows companies to build out an informational page within LinkedIn. This one is still under development, in my opinion.
I'm less excited about some of the other changes. Endorsements is a nice idea but can easily get swamped as users find it very easy to endorse (Debra Donston-Miller has a very good article on some of the recent changes in LinkedIn, including why recommendations are better than endorsements.
I was one of those many free LinkedIn account users and would probably have stayed that way until I thought about fitting LinkedIn into an overall social media strategy. Here's how it works for me and here's why I upgraded.
It still all starts with a contact. The essential dilemma of what to do with all those business cards you collect has existed since business cards were invented. However, just like one of those laws of physics, a business card contact at rest tends to stay at rest. I use Cloud Contacts to ship off the cards I collect at events, etc., and get them quickly (in a day or two) transferred from the card to a database that can be easily downloaded, in my case to Google Contacts. From Google Contacts I can select the contacts I want to download to LinkedIn for building connections. The next step for me is to use Nimble to get a social graph of those connections and see where and how those connections are conversing. This is probably not the perfect process, but it is a process. Anyone who has not figured out how to keep the conversation going after making a contact is missing a business opportunity.
For me, the upgraded account was a way to be more precise in contacting, connecting, organizing and communicating with the larger LinkedIn audience. If you are in the business of building communities, creating events, organizing panel discussions or making the content you create seen by the precise audiences you want, then the upgrade seems worth it. My advice to take advantage of the free one-month trial offer to see if the advantages outweigh the $15 or so monthly cost.
In a world of social evaluation systems such as Klout and Kred and any number of new social networks, LinkedIn (founded in December 2002) is one of the older members of the social network club. If you haven't taken a look lately, it is worth your while to see what is new at LinkedIn.
The business world is changing. Is your company ready? E2 Innovate, formerly Enterprise 2.0, is the only event of its kind, bringing strategic business professionals together with industry influencers and next-gen enterprise technologies. Register for E2 Innovate Conference & Expo today and save $200 on current pricing or get a free expo pass. Nov. 12-15, 2012, at the Santa Clara Convention Center, Silicon Valley.