But our favorite professional network, LinkedIn, is nowhere to be seen. For the past year, LinkedIn’s social login product has consistently held 1% market share, and their reasoning for such is clear – they don’t need to have more. Unlike LinkedIn, Facebook, Google and Twitter make an overwhelming majority of their revenues from their advertising products. Their ads rely on two vital pieces of data, user volunteered and user collected.
User volunteered data on Facebook is your age, where you live and the television shows you like. On Google+, the data you volunteer is whatever you type into the search field. The second piece of information – user collected – is tracked as you interact with content around the internet. Websites that use the ‘like’ button, Facebook Login button, Google+ connect button or +1 button allow Facebook and Google to match our behaviors on those websites to our social profiles. In other words, Facebook and Google follow our activity around the internet and on our phones to build out what they know about us, and let advertisers target us on their respective advertising networks.
LinkedIn doesn’t need more user data. Their business model is decidedly different, despite the push toward a Facebook-esque, work-appropriate, news feed. In Q1 2014, LinkedIn earned 58% of its total revenue from Talent Solutions, a recruiter specific product. It generated 22% from advertising and 20% from LinkedIn Premium. Some might argue that LinkedIn is trying to generate an increasing percentage of its revenue from advertising, but advertising as a percentage of revenue remained constant from the previous quarter. It was 23% of total revenue in 2013.
LinkedIn makes a majority of its money from recruiter specific products and the company is concerned that that majority would decline if LinkedIn aggressively pushed its social registration product. Whenever a person uses a social login product, such as the one offered by Facebook, that person exchanges certain pieces of information to view whatever is provided by the website or app containing social login.
It works like this: l give you information about my personal profile, my email address and maybe where I currently live. In exchange, I won’t have to remember a username and password, and I get to watch an interesting video. When this exchange occurs, a third party has access to data that was previously only held by Facebook or Google.
Now, do this for every site you visit on the internet and volunteer some of the same information. Facebook and Google are no longer the two companies that know the most about consumers. Forbes, Candy Crush, ESPN and the like all have similar information and can use it to their advantage.
Facebook is cracking down on this with Graph 2.0 – and making specific pieces of data such as user likes more difficult to obtain. But this is a result of oversharing (ironically). Facebook and Google gave away too much data and are cracking down on their login services to take back control.
LinkedIn likely saw this and strategically decided to not go this direction. First, they don’t generate more than a quarter of their revenues from advertising. Second, they are reluctant to give away control of any data that makes their recruiting services valuable. If all of a sudden another professionally oriented website or app utilized LinkedIn login and collected large amounts of professional graph data, they could develop their own recruiter specific products and compete with LinkedIn. LinkedIn knows this, so don’t expect them to promote their social login product any more than they have been.
And for us, this means we all have one social media platform not turning into an ad network at scale. Big data is big business, but you’ve got to put your money where your mouth is, and for LinkedIn, they are fed by user and recruiter trust.