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24/03/2014 by
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3 Years After Its IPO LinkedIn Turns Into A Media Company?

May 2011 LinkedIn went IPO on the NYSE almost a year before Facebook and with much better results. 3 Years later however, LinkedIn is forced to turn into a media company?

linkedin ipo 616 500x304 3 Years After Its IPO LinkedIn Turns Into A Media Company?

Despite LNKD’s enormous relative success compared to Facebook, both in terms of financial results and IPO performance, LinkedIn stock has been dragged down over the last few months by the undercurrent of the Facebook Titanic.

Turning into a media company, will that destroy future analyst predictions in positive ways?

Discover the insights in this story.

What Are the Post-IPO strategies for LinkedIn?

In 2010 LinkedIn became profitable. In March 2011 – when the company turned eight-year-old – it hit the 100 million user mark.

linkedin 100 500x291 3 Years After Its IPO LinkedIn Turns Into A Media Company?

I remember that moment well, since I was member number 85,189 and got a nice thank you note from Reid Hoffman, its co-founder and chairman.

Do I think that the stock market has it all wrong? Like e.g. analysts are being wrong about Amazon all the time? Yes and no.

LinkedIn has well balanced global breadth and obvious business model advantages over the traditional social biz model of gathering eyeballs. They seem able to turn free memberships into premium (paid) memberships as well.

LinkedIn has also disrupted many job sites and recruitment companies over the last few years. LinkedIn is “like a religion” to corporate recruiters as well as job-hunters. That allows them get paid on both sides of the buyer – hirer continuum.

Nevertheless, LinkedIn seems to be in need of a new post-IPO strategy.

Why LinkedIn Turns Into a Media Company?

Two years after the debuts of the largest IPOs the markets have seen since the first dot-com bubble, two networks dominate: LinkedIn and Facebook.

linkedinsuit 500x278 3 Years After Its IPO LinkedIn Turns Into A Media Company?

With the market coming back post-recession and job opportunities starting to heat up again, it is LinkedIn’s market to lose.

However, in October 2013 LinkedIn caused some investor concern when its latest earnings call’s growth guidance was lower than expected.

The professional social network leader has added to and refined its business over the past years. What will LinkedIn do next?

Looking ahead, the strategic insights should include:

  • LinkedIn’s focus has been, and continues to be, end-user content consumption and advertising and business marketing and recruitment tools. As competition increases for time and media dollars, will LinkedIn be able to find new products and services for the enterprise and compete with the likes of Oracle?
  • LinkedIn has reinvented professional networking into professional branding but at the cost of the company’s talent solutions, arguably its bread and butter.
  • It is too soon to tell whether LinkedIn’s acquisition strategy is adding or distracting.

If LinkedIn wants to be a media company it should:

  • Lower its CPM and CPC prices by at least 25%.
  • A CPM price of € 12.75 is way too high for simple business users.
  • Same story for the CPC price of € 2.75.
  • These prices are affordable for recruiters, not for ‘consumers in business’.
  • Go for mobile media. But with lower CPM and CPC prices.
  • Implement programmatic advertising and RTB in much smarter ways.
  • Offer members and recruiters a much better big-data dashboard and suite.

LinkedIn Advertising 500x436 3 Years After Its IPO LinkedIn Turns Into A Media Company?

LinkedIn’s pricing structure for CPM and CPC. Click visual to enlarge.

My Opinion

I know that financial analysts can be very impatient and very short sighted. Should I mention Amazon.com again?

So it’s way too early to give up on LinkedIn. They’ve got plenty of opportunities to coin their space. Trust me, I’ve got 20 years experience in digital marketing at C-level.

But co-founder and chairman Reid Hoffman will need to work hard. And hire smart.

He is indeed famous for telling startups what to do. Now he will need to proof to his investors and shareholders that he is able to turn LinkedIn into a more profitable media company.

What About You?
Will LinkedIn become a successful media company? What should be their next steps? We all get smarter from peer discussions, so share your opinion.

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About the Author
Igor Beuker is an acclaimed trendwatcher & pro speaker, serial entrepreneur, marketing consultant and board member at several disruptive media, technology and entertainment firms. Book Igor as keynote speaker, follow Igor on Twitter or contact him via LinkedIn.

 

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