In the span of 24 hours this week, the two most important (for
now) publicly traded social networking companies in the world,
) and LinkedIn (
), each made fairly minor strategic moves that did a magnificent
job of highlighting the major differences not only in their
corporate identities but why investors have thus far embraced one
and abjectly shunned the other.
First, LinkedIn on Tuesday unveiled a new feature that will
let its 175 million-plus users easily follow a panel of 150 or so
"influencers" including the likes of President Obama, Richard
Branson, a slew of other business leaders, entrepreneurs,
bloggers and even LinkedIn CEO Jeff Weiner himself.
The idea is that because LinkedIn users generally skew older
and more "professional" than the 950 million-plus Facebook
devotees, giving them convenient access to these prominent
thought leaders' will encourage longer and more frequent visits
to the site which, in turn, will generate more advertising
revenue and that elusive "stickiness" that all online operations
LinkedIn is still working out the "Who" and "How" and "Why" of
this evolving reservoir of deep thinkers but the overall idea
would seem a logical fit for its audience of professionals who
mainly use the site for job-seeking purposes or to inundate their
networks with links to their various professional endeavors.
Users can pick and choose which influencers they do and don't
want to hear from. Bottom line: it's free and potentially adds to
the value of the site for users.
And while LinkedIn has been trading for almost exactly one
year longer than Facebook, it's still very, very early. That
said, the stock's performance (on the stodgy, old NYSE) has been
nothing less than spectacular as you can see here:
Meanwhile, Facebook on Wednesday countered (indirectly) with
news of its own, announcing a new feature that will let U.S.
members pay to promote their posts to friends in the same way
that advertisers do now. Having a blowout Halloween party or
garage sale or conniption fit that you want everyone in your
network to know about? Pay the piper.
The company didn't detail the exact price it would charge
users to bump up their posts in all their friends' news feeds but
this potential new revenue stream has been in dress rehearsal in
20-some other countries and, apparently, is something that
Facebook thinks its younger, more socially obsessed users would
be willing to punch in their credit card numbers to leverage. It
costs users money and, quite certainly, will be an annoyance to
users who receive the "favored" posts. The move further cements
the view here that Facebook is a great service, if sharing is
your thing, but not such a great business. If you have to pay to
get your ramblings noticed on Facebook, isn't that a little sad?
Perhaps Aunt Sally has already hidden your posts.
As you can see from this chart, Facebook's post-IPO run has
actually been worse than advertised when juxtaposed against the
sharp performance of the "younger, hipper" NASDAQ as a whole:
Time will tell if either of these new initiatives will make
much, if any, impact on the short- and long-term financial
performances of both of these social networking giants. But at
least they're trying.
LNKD Revenue Growth
On the surface, LinkedIn's new feature smacks of a snoozefest
waiting to happen and probably not particularly engrossing to the
majority of its users who are either too busy working or looking
for work to nestle in for Richard Branson's musings on whatever.
Likewise, Facebook's pay-to-display scheme probably will find
some takers -- depending on the price -- among the
child-photo-sharing and Spring-Break-updating crowd. But then
again, chances are most of the people who would actually consider
paying to barnstorm their "friends'" news feeds probably are long
on time but short on the expendable cash required to sustain an
extended self-promotion campaign.
Larry Barrett is an editor for the
YCharts Pro Investor Service
which includes professional