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Is LinkedIn in Terminal Decline?

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It was reported in the Financial Times on 30th April 2015 that LinkedIn’s results will not meet their anticipated revenues and that the value of the company has fallen by $8bn. LinkedIn also reported adjusted earnings for the year of $1.90 per share, considerably less than the $3.03 that had been anticipated.  Equally its net loss also increased compared to the similar quarter last year.  So is LinkedIn in terminal decline or is this just a temporary blip?
 
I have been a user of Linkedin since 2004, the 175,000th person in the world to register and probably one of the first in the UK. Since then I have seen Linkedin in many incarnations – and seen it grow from a ‘novelty’ website into its pre-eminent role today.  It now has 364 million members and continues to attract new members. Its revenues are derived from subscriptions, advertising and business services, predominately recruitment focussed, indeed most of its investment is on talent solutions. Arguably it is a global database of CVs and mainly used for this one purpose, Talent Acquisition.
 
Herein lays its problem.  I believe it has the potential to generate considerably more income , yet its dogged approach to dominating talent and recruitment has left it exposed to the vagaries and uncertainties that exist in this sector.  I would surmise it has now reached saturation point and that this source of income will continue to plateau.  If one studies LinkedIn’s own summary of users in Quarter 1 of 2012 it had 161million member and 50million unique users. Quarter 1 2015 the company had 97 million unique users and if it had kept pace with its earlier growth should have nearer 120 million unique users (potentially even more if members saw it as an indispensable business resource).  So where can LinkedIn generate significant incremental revenue and why are Members not engaging with the site?
 
LinkedIn ‘chooses’ not to generate revenue from the ‘power to connect’, however with approximately 2  million ‘Groups’ managed by individuals or companies (my one regret is that I did not establish the UK Marketing Forum – set up by more media savvy people than me),  they have given control of a revenue opportunity to its users. I genuinely believe that Linkedin could (or should) be the B2B equivalent to Google in search advertising and should be taking a significant slice of its advertising revenue as well as providing other tools for business interaction (e.g. voice/video conferencing, offline conferences, networking events, etc.). Other potential revenue opportunities could include its completely underutilised ‘Contact For’ – for example, as a recruiter I may be willing to pay for leads to help a company recruit. A manufacturer may be seeking distributors in a territory that they have no presence. A software engineer in the US may be seeking information about protocols in Brazil etc.  The data it generates equally could be a valuable resource to third parties.
 
It has in my view another major fundamental problem which again may account for its problems. Its usability. As I said earlier I have seen many incarnations of the site and the latest one has made no difference to the customer experience. Indeed as it layers new services and attempts to become ‘social’ it does become harder to access elements of the site. For example you see that a connection has posted an interesting article but you don’t want to read it there and then. Try finding it again later that day or 3 days later!   To access recent ‘Contacts’ or ‘Saved Profiles’ is a three or four step process , indeed a Google search of LinkedIn usability contains numerous other examples and again when compared to other popular sites it is not very ‘user friendly’.
 
LinkedIn is at a crossroads – it can continue as is and focus on the Talent and Recruitment industry or it can explore new opportunities for growth and at the same time carry out a significant usability and experience exercise to improve the its members engagement and usefulness of the site.  Change it must otherwise it’s over reliance on one key business sector will result in even greater losses and eventual decline.