Is LinkedIn Really Linked In?
Michael is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
With a market cap of slightly under $10 billion, LinkedIn Corporation (NYSE: LNKD) has a larger market capitalization than Monster Worldwide (NYSE: MWW), Dice Holdings (NYSE: DHX), and Manpower (NYSE: MAN) combined. LinkedIn just went past its first year anniversary as a publicly traded stock, yet still has a sky-high price-to-earnings ratio of over 500 (depending on your source, some places calculated it as over 600). Even though LinkedIn’s recent income statements this past year looked positive overall for the company and its shareholders, and the growth trend appears to be on the rise slightly, is the company really linked in?
I’m currently employed but always interested in new opportunities that may exist like any other professional in the workforce. I had high hopes with LinkedIn because it appears to have everything going for it. It has a great user interface. It is used by millions of job hunters and thousands of employers and continues to build membership through word-of-mouth which is always a huge plus. It is straight forward overall in that members are there primarily to find jobs – not play games, instant message, or post pictures of what they did last weekend. Lastly, LinkedIn keeps improving the search tools and the other functions available on the site. However, I recently started to question whether LinkedIn is really everything everyone claims it to be.
I decided to join the free month trial after spending a couple of months using it for free and tinkering with my own profile. As I was building up connections to reach 100% profile completeness according to the site’s requirements, I tried to focus on searching for the next best job opportunity. The first thing I realized though, after several days of doing various searches, is that it appears there is a lack of companies utilizing LinkedIn to post job opportunities. In fact, for engineering jobs as an example, you will often see a relatively small listing of jobs within a 100 mile radius (100 mile radius is the largest selection when you enter a zip code or city). When your search brings up only 40-50 jobs in that size pool that supposedly covers hundreds of companies, you start to wonder about the current range of LinkedIn. Another thing I noticed is that companies that are listed are not your big name powerhouse companies that are household names or at least popular names within a specific academic discipline or degree.
Now don’t get me wrong. LinkedIn has helped several friends of mine get new jobs in the past year. However, many of these companies are usually smaller and don’t have the brand recognition of a big worldwide coporation. LinkedIn actually reminds me of the same issues that occur on other job sites like Dice, Monster, or CareerBuilder. You will mostly see jobs listings of openings that aren’t in high demand by job hunters or companies that are relatively unknown. Many of the jobs are very talent specific and some are relatively not friendly to entry-level job hunters or people that are switching careers or even just changing from another company which does things in a completely different way regarding systems, programs, company culture, software, etc.
Many of the big companies, regardless of your academic discipline or skill level, have their own career database on their own websites. Many of the Fortune 500 companies post their job openings on their own websites because that is where job hunters look if they want to work for that particular company. There is no reason for these bigger companies to pay and use LinkedIn.
Another flaw I see is that LinkedIn offers various levels of membership outside the free membership that the majority of users use. I tried the Premium level for free after being emailed weekly to try it from LinkedIn. Supposedly it puts you at the top of employer’s lists with the LinkedIn badge, gives you opportunities to communicate easier, access to other search tools, and it gives a couple of other perks. However, after the free month trial, I saw no use for this membership and saw no change in job search results. I even asked those same friends that got jobs through LinkedIn and they said they never bought the other levels of membership and just used the free version. I can see why LinkedIn would offer this in order to try to monetize membership levels in exchange for seemingly more opportunities for job hunters. But I just don’t see the value. Even with the LinkedIn badge, I never felt ‘linked in’.
LinkedIn is still probably the best online job search tool out there outside of directly contacting companies you are considering simply by user volume. However, it appears it has a lot of work to do to really reach its potential. Now it could just be the economy, but I think there are far more than 40-50 engineering jobs within a 100 mile radius in a large metropolitan city.
LinkedIn needs to find a way to use its business model (which resembles the levels of memberships seen on many dating sites like Match.com – owned by InterActiveCorp (NASDAQ: IACI)) to really profit from its huge membership number. I think it starts with attracting the hiring companies instead of marketing to job hunters. After all, job hunters for the most part are looking for a job because they need the money. They don’t need to pay a search site with no guarantees of landing a job.
LinkedIn can surpass the previous job search sites because it has a solid foundation going for it. Unlike many others, where you submit a resume, and you have no idea who or what company receives it, LinkedIn is more direct and you don’t necessarily submit a standard ‘resume.’ Instead you create a profile of academic and career experiences. You aren’t exactly labeled as looking for a job by being a member on LinkedIn unlike a site like Monster that may get you in trouble at your current employer. You are just connecting with friends and coworkers, putting yourself ‘out there’ for that golden opportunity, and trying to be linked in.
mikecart1 has no positions in the stocks mentioned above. The Motley Fool owns shares of LinkedIn. Motley Fool newsletter services recommend LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.