LinkedIn (Still) on the Rise

Earlier this year, Facebook was under a lot of scrutiny from Wall Street and the interested public. The company couldn’t seem to get its act together in terms of ad revenues, nor could it figure out how it fit in the mobile world. Recently, Facebook has shown signs of recovery, and even success, in the last quarter. They still have to make up for losing 50% of their stock value since going public in May of this year.

However, one of Facebook’s main competitors has demonstrated success after success since it went public in May of 2011. LinkedIn, the mature, business-oriented brother of Facebook, has a model that works, and the news from last night proves it. Maybe it’s time to really start paying attention to LinkedIn.

LinkedIn Continues to Perform

Benjamin Pimentel for MarketWatch reports that LinkedIn’s “shares were up sharply late Thursday” mostly because “the company’s third-quarter results blew past Wall Street’s estimates.” A sort of performance that leads writers to say you “blew past estimates” is a sure sign that you’re doing something right.

What’s behind LinkedIn’s success? This quarter saw a significant jump in revenue and also benefited from a rise in users. “Revenue was $252 million, up from 139.5 million,” and membership was up to 187 million, from 175 million last quarter. On top of that, their stock price is up 70 percent this year. Those sure are significant increases, especially when one considers Facebook has almost over five times the number of users, but is still digging itself out of a hole.

Doing it Right

LinkedIn has been met with success almost every quarter because the site is constantly improved and it monetized a wide variety of services. Tom Forte, an analyst in Ari Levy’s Bloomberg piece on this story states, “[LinkedIn] clearly [has] one of the better business models in the Internet space and they’re doing a great job executing on it.”

So what exactly is LinkedIn doing right? For starters, they continually improve and revamp their users’ profile pages and experience. How many articles have you seen about people complaining about LinkedIn’s changes? How many complaints have you seen from Facebook users about changes? Yeah, I know who wins – or should I say loses – on that one.

LinkedIn’s mobile interaction works, and it works well. They’ve recently added features that make updating information easier, as well as upgraded interaction tools so that professionals who are connected can easily share information.

Focused and Successful

I think part of the reason LinkedIn is constantly improving and beating out larger competitors is their focus and understanding. They are a social media platform, but more importantly, they are a company that knows the purpose of its product. LinkedIn understands why people use their service and makes improvements to make the user experience better and more conducive to its purpose.

LinkedIn doesn’t try to be everything to everyone, nor do they pretend to be everything to everyone. It can be very hard to pull that off in the business world; few companies get away with that. I think I was able to understand LinkedIn’s success when I asked myself, “Why do people go to LinkedIn?” That answer is pretty easy: to network, to have a professional spot on the internet, and to possibly find a new job. I could easily answer in one sentence why the site exists and justify it. If people were asked why they use Facebook, there would be a wide range of answers and reasons. I think LinkedIn’s self-understanding drives its success, and it might be something Facebook should try to learn from.

What do you think of LinkedIn’s success? Do you think it will continue?

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Patrick currently lives in Somerville, Massachusetts, where he is studying for a Master's Degree in Intercultural Relations. Upon graduation from Penn State in 2008, he spent two years overseas in Kyrgyzstan with the U.S. Peace Corps. While writing is currently his chosen way to put food on the table, he loves fitness and exercise, which he believes makes up for his avid computer gaming habit.

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