How LinkedIn Has Turned Your Resume Into A Cash Machine

LinkedIn’s chief executive, Jeff Weiner, doesn’t want to talk about Facebook. No, no, no. “I’m not going to get into comparisons with them,” he declares. And yet a few minutes later Weiner rises from his chair, walks over to a whiteboard and energetically sketches a diagram that the world’s other giant social network can’t match. Weiner draws three concentric circles to show how LinkedIn makes its money.

The outer one is subscriptions. Next, marketing and advertising. And in the center is LinkedIn’s richest and fastest-growing opportunity: turning the company’s 161 million member profiles into the 21st-century version of a “little black book” that no corporate recruiter can live without.

“That’s the bull’s-eye,” he says.

Recent attention in the social space has focused almost entirely on Facebook, with its 900 million users, 28-year-old celebrity CEO and bumpy initial public offering. In the first month after its May 18 IPO Facebook stock skidded an embarrassing 17%. Hardly anyone noticed, meanwhile, that LinkedIn shares have leaped 64% this year. Mark May from Barkcleys Capital says LinkedIn is on track to gross $895 million and net $70 million, up 71% and 100%, respectively, from 2011.

Compare this performance to three and a half years ago, when Weiner joined LinkedIn. The company was running a $4.5 million annual loss, paying bills mostly by hawking online ads and peddling “premium subscriptions” for as little as $9.95 a month to journalists, hedge fund managers and the like. Linked In was too bashful for its own good.

That’s when Weiner’s bull’s-eye emerged. Rather than try to wring 20 bucks here and there from individual users, he refocused the company on selling a vastly more powerful service to corporate talent scouts, priced per user at as much as $8,200 a year. Today thousands of companies use LinkedIn’s flagship Recruiter product to hunt for skilled achievers. In human resources departments, having your own Recruiter account is like being a bond trader with a Bloomberg terminal—it’s the expensive, must-have tool that denotes you’re a player.

There’s no better way to understand LinkedIn’s quiet savvy, in the midst of Facebook’s noisy clatter, than to compare the two sites’ financial efficiency. With ComScore Web-usage data and public financial filings, it’s now possible to figure out how much revenue the two rivals collect for every hour that each user spends on the site. LinkedIn’s tally: $1.30. Facebook’s: a measly 6.2 cents.

One could argue that it’s better to have a small slice of something massive than a big slice of something smaller. But the numbers above are further skewed by a simple fact: Facebook, which derives 85% of its revenue from advertising, makes money only when you’re on Facebook. Once you sign up for LinkedIn, the social network monetizes your information, not your time.Mark Zuckerberg can crow about how his users spend, on average, 6.35 hours per month on Facebook versus 18 minutes for LinkedIn. But Facebook users may click on only one of every 2,000 ads. Ask yourself which model seems more sustainable.

These dynamics will get further magnified as the Web goes mobile. It’s hard to deliver ads to tablets and smartphones, which causes no small anxiety at companies like Facebook and Google. At LinkedIn, where 22% of visits now come from mobile devices— versus 8% a year earlier—this surge just means more of the kind of interactions and data that it can monetize.

To see how that plays out, wander the halls of a conference with Lars Schmidt, head of talent acquisition for NPR. “Recruiters don’t stay in the office anymore,” the public-radio executive explained one morning. “You need to be much more externally focused.” His old-fashioned ritual of swapping business cards has been redefined. Schmidt became a fan of CardMunch, a two-year-old iPhone app that turns photos of business cards into digital contacts. In January 2011 LinkedIn bought CardMunch and rebuilt it to pull up existing LinkedIn profiles from each card and prompt people to connect.

The LinkedIn experience, in some ways, gets richer away from the desktop. Says Deep Nishar, LinkedIn’s senior vice president for products and user experience: “We love mobile.”

Much as LinkedIn’s long-term model makes sense, its near-term success stems from a manic dedication to selling services to people who buy talent for a living. During Weiner’s tenure LinkedIn has developed an intense, sales-focused culture in which new-account wins are celebrated by name at biweekly all-hands meetings. The best frontline salespeople for hot products such as Recruiter can earn $400,000 a year. And unlike at other Silicon Valley companies, where engineers rank as alpha dogs, LinkedIn’s salespeople pull off the most daring stunts. Sales- effectiveness leader Nate Bride once dyed his hair blue to match the LinkedIn logo—and shaved small parts of his skull to spell out the company name.

LinkedIn has doubled the number of sales employees in the past year, with the company now spending 33% of revenue on sales and marketing. That’s a startling number for a social network, more akin to the relentlessly hawking enterprise-software crowd. Oracle and Microsoft spend 20% of revenue on sales. Facebook spends 15%; Google is at 12%.

UK web owners face cookie crunch

Thousands of UK websites are now in breach of a New European Cookie law that dictates what they can log about visitors. European laws that define what details sites can record in text files called cookies came into force on 26 May. Cookies are widely used to customise what repeat visitors see on a site and by advertisers to track users online. The Information Commissioner’s Office (ICO) said it would offer help to non-compliant sites rather than take legal action against them.

Learn about the new Laws before you face the crunch

The regulations say websites must get “informed consent” from users before they record any detailed information in the cookies they store on visitors’ computers. Among websites that have complied with the law, getting consent has involved a pop-up box that explains the changes. Users are then asked to click to consent to having information recorded and told what will happen if they refuse. UK firms have had 12 months to prepare for the change and the ICO has spent much of that time reminding businesses about their obligations. The ICO has also updated its policy to allow organisations to use “implied consent” to comply. This means users do not have to make an explicit choice. Instead, their continued use of a site would be taken to mean they are happy for information to be gathered.

However, it was a “concern” for the ICO that so many sites were not yet compliant, said Dave Evans, group manager at the ICO who has led its work on cookies in the last 18 months. However, he added, it was not necessarily easy for companies to comply with the laws because of the amount of work it involved. On busy sites, he said, an audit of current cookie practices could take time because of the sheer number of cookie files they regularly issue, monitor and update. Mr Evans said the ICO was expecting sites that were not compliant to be able to demonstrate what work they had done in the last year to get ready.

“Does the new cookie law take the biscuit”- Click to tweet

Fines for non-compliance were unlikely to be levied, he said, because there was little risk that a non-compliant site would cause a serious breach of data protection laws that was likely to cause substantial damage and distress to a user. It was planning to use formal undertakings or enforcement notices to make sites take action, he said. ”Those are setting out the steps we think they need to take in order to become compliant and when we expect them to be taking those steps,” he said. “If they comply with one of those notices or sign one of those undertakings they are committing to doing this properly and that’s the main point.” As well as advising firms, the ICO has also issued guidance to the public that explains what cookies are, how to change cookie settings and how to complain if they are worried about a site’s policy.

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Co-founder of Google worries for our internet freedom

Our freedom of speech under threat yet again!

Sergey admits that he is “more worried than I have been in the past” and says that there are “very powerful forces that have lined up against the open internet on all sides and around the world.”

His comments come just 2 weeks after the UK announced that a new piece of legislation would allow intelligence agencies to access and monitor emails and internet activity of any UK citizen that it judges may pose a risk to security, this could be members of a political party or activist group. Sergey also admits that he was wrong about China’s ability to censor the web. Sergey is widely believed to have been the driving force behind Google’s decision to temporarily pull out of China back in 2005 and said then that no country would be able to successfully restrict the internet for long, but now he has changed his mind saying; “I thought there was no way to put the genie back in the bottle, but now it seems in certain areas the genie has been put back in the bottle.”

“I disapprove of what you say, but I will defend to the death your right to say it.” ― S.G. Tallentyre- Click to tweet

He is equally critical of Facebook, calling their rules “restrictive” and accusing them of stifling innovation. Google launched their own rival to Facebook, Google+ in 2011 which already has 800 million members worldwide.

With countries such as China, Iran, Saudi Arabia and Russia each trying to restrict the internet in their own ways and the US and the UK using it to spy on its own citizens, the internet is being attacked on all sides and is perhaps a victim of its own success? Restricting the internet may be an almost impossible task faced by some countries, but re-establishing the trust of users whose details end up in the hands of the government could be just as challenging for the founders & web developers of Google.