It's Who You Know

By AnnaLisa Kraft - October 31, 2012 | Tickers: FB, GOOG, LNKD | 0 Comments

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There's a group of people with, "a particular and rare set of social gifts..a special gift for bringing the world together," as Malcolm Gladwell describes them in his book "The Tipping Point." He calls them the Connectors. My best friend is one of these, gregarious to a fault, born with an internal Rolodex of hundreds of friends and acquaintances or "soon to be friends."

People like her are like the electrical charges that leap across synapses in the brain. If she had any desire for power or money, she would be a force to be reckoned with in the fields of politics or finance. These are the people who could most benefit and fire up social media sites like LinkedIn (NYSE: LNKD) and Facebook (NASDAQ: FB). An October 29 article from The Washington Post described the results of a Wharton School of Business white paper entitled, "OMG, My Boss Just Friended Me" discussing the pros and cons of Facebook friending in the office. Connectors were called integrators in the article and the takeaway was that integrators who can translate that connector personality into cyberspace will be the most successful in the future.

To really leverage Facebook, LinkedIn, and Google’s (NASDAQ: GOOG) Google Plus, these connectors have to be enticed and integrated. From Paul Revere to the elementary school phone tree and finally to Facebook and Twitter the connectors are the ones who start the momentum in communication. These are the people who gave out jobs at Tammany Hall, who ran the literary salons (like Gertrude Stein in Paris), the 19th century French bureaucrats who could hook one up with a lifetime sinecure (ah, those were the days), or the hostesses of the political salons of DC's corridors of power, most famously Dolley Madison. The phrase "it's who you know" was written about these people you need to know.

Facebook, LinkedIn, and Google Plus could be the new platform for these social geniuses but how to bring them into the fold? If I knew exactly how to do that I'd be calling their respective CEOs Mark Zuckerburg, Reid Hoffman, and Larry Page myself and not just writing a post.

Even before the days of social media most people, over 56%, according to Gladwell, got their jobs through acquaintances, what he called "the strength of weak ties", and LinkedIn is the new medium of weak tie jobs. It is the ever more necessary website for anyone looking for a job (or just looking for a better one, jobs don't last forever like in the fifties'). The Washington Post article quoted a social media branding guru, Kirsten Dixson, who said, "Every single professional needs to be on LinkedIn and leveraging it." LinkedIn could be even more valuable if it could also bring in CEO's, more likely in their late 40's and 50's who may have grasped that their company needs a social presence but aren't leveraging themselves for the company. Sir Richard Branson, CEO of The Virgin Group gets it and thinks more CEO's should, too.

Facebook supplanted MySpace but Facebook could itself be supplanted if it can't figure out how to attract these social dynamos. One young man mentioned in the Post, an integrator type, had more than 5,000 Facebook friends, the limit the social site allows and would have more if he could as he uses it as a business network. Facebook is still a more personal than professional experience and it is a chore to defriend people who pollute a page with political or religious rants so you can keep your profile business-appropriate.

Google Plus has yet to gain traction and while social influence quantifying sites Klout and Kred purport to identify the connectors, all they really measures is how often people engage on Facebook, Twitter, etc. LinkedIn may be the most successful so far as it is still the business social connection site.

That said, competing professional sites are popping up just like deal sites did with Groupon. There will be even less incentive to sign up for LinkedIn's subscription services. If one of these other sites can gain traction with Connectors they will have it all. Their platform may be proprietary but tweaking is the sincerest form of flattery and still legal. LinkedIn has a P/E of 856.97 and earnings are expected to be disappointing on November 1.

Like Facebook, it hasn't climbed back to the share price heights of its initial IPO. Facebook is looking better with only a 113.69 P/E but its lock up expiration for employees is imminent. Maybe they'll sell, maybe they'll hold. It doesn't really matter for more than a few weeks. Facebook has done a few things right lately with its Gifts initiative but it's not capturing the essential personalities it needs. It has numbers, millions of users but it needs that one big thing before it can be seriously considered an enduring social media presence. Last week's Q3 earnings were better than expected and it looks like they are on the right track. Maybe to really monetize mobile they just need to find definitive connectors and hand them mobile phones. Simplistic, but wouldn't it be funny if I was right? I hate to say this because exploiting these connectors' gregariousness and natural altruism is so materialistic but it's what could put Facebook over.

Luckily for Google, it has an entire conglomerate of different enterprises to support itself while it explores social media. It could just google social connectors and figure it out. But even down $100 from its 52 week high of $774.00 Google is no passing fad. Despite a recent earnings disappointment, it has the tablets, the cloud, the search, the ads, Android, and so much more, that likely only a few top executives are aware of everything under the Google umbrella. Google has a 21.16 P/E and is the most viable investment of these three but not for its social media foray.

With all these tech geniuses working for these three companies surely one can find the key to the hearts of these big-hearted connectors who think outside the social box. Maybe all they have to do is find one, ask for help, and wait for their typical response, "I have a friend who could help you with that."

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