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  • 29 NOV 2007

    LinkedIn “Just a Bunch of Email Addresses”?

    A post by Chris Beauchamp as Marketing

    Here at DoublePositive, we’re big fans of LinkedIn. Every person in our organization, no matter what their function, has a LinkedIn profile. We use it to generate sales leads, network with partner companies, to rectuit potential employees, to interact with a larger community — we even use it to promote the blog you are reading right now.

    While we are all very active users, we try not to be LinkedIn “whores.” In other words, just because I’ve met someone once, swapped business cards at a trade show, or know someone through some random connection — that doesn’t mean I will accept your LinkedIn invitation to connect. I’ve got a good network, and I don’t want to dilute it.

    We’ve also noticed how targeted the advertising on LinkedIn is, and why shouldn’t it be? LinkedIn knows everything important about me — my age, my sex, where I live, my job, my address, where I went to college.  Combine all of that information I’ve provided with some behavioral targeting, and LinkedIn knows me better than I know myself. I would say that I click on more ads on LinkedIn than any other website I’ve ever visited.

    So LinkedIn is HOT, helped in large part to the $15 billion valuation Facebook recently received. So I wasn’t surprised to read that News Corp. is considering acquiring LinkedIn, perhaps for $1 billion. Is LinkedIn worth $1 billion? Who knows — after all, they are doing no more than $100 million in annual revenue. But, what I do know is that this guy is a freaking idiot:

    “It’s all bulls*%t,” says Global Equities Research analyst Trip Chowdhry. “The market has to come to some realization that LinkedIn just has a bunch of email addresses. I don’t think News Corp. is a sophisticated buyer. The company should be worth 1.5 times revenue and that’s it.”

    Wow… Here is a guy who just doesn’t get it. LinkedIn “just has a bunch of email addresses.” And Google is just a bunch of links. And YouTube is just a bunch of videos. And Ebay a bunch of junk.

    While newspaper publishers continue to see shrinking revenue from classified advertising, News Corp. sees LinkedIn as a critical component of its recent acquisition of the WSJ and other publications around the world.

    Question the valuation, but don’t make yourself look like a fool by suggesting that LinkedIn is nothing more than an email list.

    You just read:

    LinkedIn “Just a Bunch of Email Addresses”? by Chris Beauchamp

3

    Sean Fenlon 1532 days ago

    CB,

    Could not agree more about LinkedIn.

    I admit that I received dozens of these invitations from people I know to join their “LinkedIn Network” before 2006 and I dismissed them all like flies, viewing them as Plaxo-esque Spam or half-baked Evites for business or something.

    I was wrong. It is indeed an incredible business tool. Simply put, it is social networking for professional business people.

    Anyone at DP that has used LinkedIn agrees — you can meet people you would’ve never imagined, and everyone benefits equally.

    Also, it looks like that particular analyst has a bit of a pattern of dropping ridiculous statements/comments onto the web and into the blogosphere. A quick search on his name yields some pretty ridiculous quotes:

    http://www.google.com/search?hl=en&q=Global+Equities+Research+analyst+Trip+Chowdhry

    – Microsoft has dealt itself a winning card in its search face-off with Google

    – Microsoft isn’t a marketing-savvy company, as some might think,” says Trip Chowdhry, an analyst at Global Equities Research. “Matter of fact, they are dumb.

    – Betting Oracle will be back

    – customers who find fault with AT&T Inc.’s wireless network

    – It’s damn cheap for a company that already has a global presence

    – Investor optimism regarding YouTube was misplaced

    He’s right that LinkedIn communicates with its customers/users through email, but so does Google and Amazon.

    SPF

    Avi Fischer 1532 days ago

    I agree that Linkedin is an incredibly valuable tool. However, it is starting to suffer from some of the problems that come with success and size, just as MySpace and Facebook have. The LinkedIn network is very useful when it is small, and being a part of it gave you a way to make “special” connections, where as its current size is much more of a free-for-all in which the access is greater but the value of belonging is less. LinkedIn is also drawing a big part of the recruiting/job searching market… which is useful to people directly involved in recruiting but a huge drain on people who are not. People in middle-high level management at attractive companies must be constantly bombarded by resumes and introductions.

    Rob Leathern 1532 days ago

    That’s exactly it, Avi – the essential problems with friend- or connection-based networks are that the link value gets diluted as more and more people get added, and also there is a difference in the value of any given link since it means different things to different people. This much has been clear for a long time with LinkedIn, with “hyperconnectors” trying to link to as many people as possible while some people link only with people they really trust, others more generally with people they’ve met or done business with etc. So it’s a challenge for these companies to maintain the relevance and provide self-correcting mechanisms for users to create sub communities within the larger group, to be able to focus their attention on certain areas vs. others and so on.

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