LinkedIn + Content = ad revenue

July 18th, 2013 | by Jason Alba |

Check out this post from Ad Age: LinkedIn Ramps Up Content In Pursuit of Ad Dollars

I get what they are doing. This is part of the strategy to put more stuff on LinkedIn and lure us to stay there.  I think this is the natural evolution of a website like LinkedIn, which has tons of signups, users, page views, etc.

I personally think they are doing it the wrong way.

First, the acquisition of Pulse for about $90M. Pulse is a system to bring content into LinkedIn.

The problem with that is that they are pulling in content from…everywhere.  Why do that when they have tens of millions of active users who have their own content, and would essentially curate the web to find and share rich content?  In other words, we don’t need AP info on LinkedIn… I get that from my local news site, HuffingtonPost, and any other site you already go to for Content (buzzfeed, techcrunch, etc.).

Bringing in a lot of noise that is managed by yellow-journalist people was a misstep, in my opinion.  They should have made it easier for people to find and share outside info that is relevant to them, AND, like Facebook, make LinkedIn the place where you talk about the news.

But hey, what is $90M.

Second, LinkedIn needs to go back to its roots and look at the value proposition it started with.  Many years ago LinkedIn was a database to connect with people, find people, network with them.  If they turn it into a content site they will become another AOL.  No one does what LinkedIn has been spending years doing, and it seems like they are taking it in a direction to be a follower instead of leader.

I would love to see LinkedIn go back to the roots of connections and relationships (anyone remember “relationships matter?”), and enhance and grow those features.  And especially look at their policies that tend to encourage people to spend less time on LinkedIn.

The next few years will be interesting.

  1. 2 Responses to “LinkedIn + Content = ad revenue”

  2. By Jeff Young on Jul 18, 2013 | Reply

    I totally agree. I have been saying for a long time now that LinkedIn needs to concentrate on the niche they created for themselves in the first place (a professional social network). They keep doing things that take away aspects of this.

    For example, recently I read that they are going to discontinue LinkedIn Signal at the end of July. I have used LinkedIn Signal every day for three years now. It is the absolute best way for you or me to see what our network has shared in the last 24 hours and I teach people to use it every chance I get. Please don’t let them take away this valuable feature! Go to the Contact Us link below and tell LinkedIn to please keep Signal. Then share this update with all of your connections so they will do the same thing.

  3. By Mark Williams on Jul 19, 2013 | Reply

    Interesting article Jason. For what its worth my take on this is as follows;
    LinkedIn has been achieving 70-80% revenue growth for some years now and its shareholders will expect this to continue. The majority of this revenue (nearly 2/3rds) has come from recruitment products and yet companies are not spending more money on recruitment (if anything less) so this revenue is being taken out of the pocket of the recruitment industry.
    The recruitment industry will not disappear completely so this ‘pot’ that LinkedIn are taking from will not continue to give them 70-80% growth, in fact I predict that this will drop at alarming rates in 3-5 years.
    They are developing products for sales professionals which will help but they can only go so far with them without LinkedIn becoming full of spam.
    Premium upgrade revenue is unlikely to be the answer because the more they expect users to pay, the less users there will be and they need a high number of active users in order to support all other revenue streams…….so the only answer has to ad revenue.
    When you think about it LinkedIn have been developing functionality aimed at gaining important data from us for years.
    Profile strength measurements
    LinkedIn Today
    Thought leader following and now Pulse
    This could also be an explanation for why they have always insisted on us only connecting with people we know well (valuable data).
    When they combine all of these things they are accumulating a valuable profile on all of us that they can use to attract advertisers.
    I personally find my news elsewhere, so LinkedIn Today/Thought leaders is just an irritating presence on my homepage that gets in the way but I am not your typical LinkedIn user and neither are you Jason!
    LinkedIn know that they need to find ways to get the average user engaged. Too many users do very little on LinkedIn and this prevents them from obtaining the data & showing the activity levels they need to sell more advertising. They need to find a way of engaging the average Joe user who still reads the morning paper that they have read for many years – hence the acquisition of Pulse.
    $90m is a lot of money but I do think that LinkedIn has benefitted previously when they have aquired external talent into the business (LinkedIn Contacts being the best example) so that investment is not just about the Pulse product, its also about the Pulse team.
    The next few years will indeed be interesting and critical to the long term viability of LinkedIn as a publicly listed company.

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