Linked – LinkedIn Problems Run Deeper Than Valuation
“The problem stems from each of the company’s revenue streams, which ultimately diminish the business value of using the service.
Whether it’s being paid to promote content, focusing on sales and recruitment over other professions, or interruptive advertising, these streams incentivise poor behaviour by individual users on the site.
In other words, LinkedIn’s business model inhibits the growth of the network; and the network growth is ultimately what its business model is reliant upon.”
LinkedIn is not alone on this, it’s just the network where it’s most acute because we’ve gotten a bit used to advertising on other networks. You could make the same statement about Facebook and Twitter. The more they try and cash in on advertising revenue streams, the less usable the service becomes for their own users who are just trying to connect with other people.
For example, since Twitter and Facebook started putting ads in the news feeds, they have absolutely become slightly less useful. The connection that we signed up for is being interrupted by advertising. In order to grow their profits, they will have to continue to do that more and more. How do you continue to grow your revenue without driving users away? There’s only so much advertising you can push at them, where does the revenue that shareholders demand come from?
LinkedIn Problems Run Deeper Than Valuation
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