The next step in our strategic evaluation of LinkedIn is a look at the professional network’s key competitors. For the sake of this exercise, we have identified three primary competitors:
LinkedIn maintains a unique and commanding position among social networking platforms. The firm’s financial niche market dominance, rapid user growth, and financial resources have given the company a source of strength against would be competitors. While the number of firms that pose a credible threat is shrinking, there are a number of companies with the potential to jeopardize LinkedIn’s growth. As previously stated, in 2011, LinkedIn generated 50% of its revenues from Hiring Solutions, 30% from advertising, and 20% from Premium Subscriptions. CareerBuilder poses the most significant threat as it directly competes for LinkedIn’s most lucrative revenue source. CareerBuilder is currently the largest online job board in the U.S., generating over 24 million monthly visitors, and having well established relationships with many of the world’s largest businesses. Jointly owned by Gannett, Tribune Company, and McClatchey, CareerBuilder has the ability to compete financially with LinkedIn in the Professional Network Services.
Twitter has the resources necessary to aggressively pursue the online job search market, evidenced by investors recent valuation of Twitter at $10 billion, a number similar to that of LinkedIn following its IPO. Studies have shown that Twitter users may be more inclined than those of LinkedIn or Facebook to apply for job postings. It is not clear whether Twitter has prioritized these opportunities, but the market could prove attractive as Twitter searches for ways to generate revenue. Additionally, Twitter’s large user community, and accompanying data, could enable it to compete with LinkedIn’s targeted advertising market.
The biggest challenge that Facebook offers to LinkedIn is in the space of revenue from online advertisements. Facebook has over 845 million users and currently does a much better job of keeping users on its website by the use of widgets and third party apps. Due to these factors its revenue generation from Ads is much higher and possess a threat to LinkedIn. And although Facebook is financially the strongest of these three firms, and has the largest user network, its early results from its foray into online job search appear to be mediocre. Similar to Twitter, Facebook has also struggled to create revenue opportunities and could make a larger push in the future.