A high proportion of people I know use Facebook as their social network and LinkedIn as their business network. LinkedIn has executed well in capturing a massive audience of business users with over 300 million members, especially in North America which has approximately one third of the network’s members (with Europe quickly catching up). Having done so, it is well positioned to replicate what Facebook has done on the social side – capture business discussions. The question is how can they best do this? LinkedIn’s Influencer Series identifies the most influential voices on LinkedIn and invites them to allow LinkedIn to distribute their articles. The distribution goes to the LinkedIn feeds of people who have opted into seeing posts from each writer. However, the relatively small number of posts and limited distribution doesn’t drive the user value and uptick in page views that could be possible if LinkedIn is to own business discussion in the way that Facebook owns social discussion. Earlier this year LinkedIn recognized this opportunity and opened its Influencer programs to its wider member base with hopes that it would generate more engagement. The move came shortly after the company disclosed that page views declined for the second consecutive quarter.

What is interesting is that LinkedIn has an extraordinary amount of information on each of us that could facilitate relevant dialogue. Take my blog, for example. My last post was on Microsoft. Assuming LinkedIn thought it was worth disseminating, (as Fortune has) they actually could identify hundreds of thousands of people who should find it relevant – everyone who ever worked at Microsoft, Oracle, Google, and other competitors plus anyone who had a large number of such people in their network, most investment bankers, etc. While Pulse allows LinkedIn members to select writers they are interested in (from LinkedIn influencers), this is very limiting as few members take advantage of curating their own content. Even if a member selects individuals to follow, it is still yields far less content than he or she might actually be interested in. Additionally LinkedIn uses some relevance algorithms to determine posts to recommend to members but this appears to me to be limited. What LinkedIn could do in addition is mine their data to expand the number of people for which they thought certain content was relevant. By expanding the number of writers to those outside the network as well as those inside who may not qualify as influencers, adding news and improving the mining of data to determine a much larger audience, LinkedIn would have the opportunity to substantially increase its position as the “go to” business network.  

If LinkedIn mined their data and alerted relevant recipients through an email of the 2-3 most relevant articles and news stories once or twice a week (and let recipients dial this up or down and also when receiving a blog post to subscribe to that blog if they wanted to receive it regularly and to hit thumbs down if they never wanted to hear from that writer again) they would be adding relevant business dialogue into the network. And a reader would only see those news stories and blogger posts that were especially relevant rather than having to opt in to all posts. This would:

1. Create a ratings system that allowed members to decide which bloggers to up vote, down vote or cease receiving;
2. Help members find new content without having to seek it out (and to control how much they received);
3. Dramatically increase page views and time on site per monthly active;
4. Increase SEO as LinkedIn would rank higher on Google search for more and more topics that were current areas of discussion;
5. Create a greater barrier to a future competitive offering from someone like Facebook or Google;
6. Increase advertising inventory.

Early on, LinkedIn editors (and a large group of advisors) would need to solicit contributors (who they should not need to pay). LinkedIn would find that many quality writers would flock to them as the ability to distribute to the most relevant members would be unique to LinkedIn because of the valuable data they already possess.

Advertising is a Strong Source of Revenue growth

Analysts who follow LinkedIn are very focused on monetization through its recruiting capabilities. While this should continue to be a prime focus, I believe there is strong upside on the advertising side. In the September 2012 quarter, Facebook drove $1.25 in advertising revenue per MAU (monthly active user) and LinkedIn drove $1.52 per MAU. Over time, Facebook has been increasing this yield relatively consistently while LinkedIn has not. In the June 2014 quarter, Facebook yield was up 76% per MAU to $2.20. Had LinkedIn followed the same trajectory their yield would be $2.68 per MAU and their revenue would have been nearly $120 million (22%) higher in the quarter. Going forward, the combination of increasing advertising inventory through increased distribution of targeted highly relevant content and exploiting that inventory better could help LinkedIn maintain very healthy revenue growth.

SoundBytes

• It was sad to see the passing of Robin Williams a true one-of-a-kind creative talent, loyal San Franciscan and someone always ready to help raise money for the right cause. He actually entertained at the last Credit Suisse conference I ran and had wonderful barbs for the gathered nobility of the tech industry. Of course, the gathered executives loved it. He will be missed.
• Congratulations to Steve Ballmer on completing the acquisition of the Clippers and to the NBA on getting a great new owner. Time will tell whether the economics of the deal make sense.