Jeff Weiner: Going public is a major marketing boost for LinkedIn

The company’s listing has been accused by some analysts of kick-starting the
second technology bubble – Farmville-maker Zynga and group buying site
Groupon are set to be the next to list on soaraway valuations – a
label the smooth-talking American strongly denies.

“I think folks are harking back to the Nineties, but it’s different this
time around,” he says. “This generation of consumer web companies
is totally different – many of them have been operating for years, generate
real cash flow and have built sustainable businesses.

“The likes of Facebook, Twitter and Groupon have established strong
leadership positions in their category and real competitive advantages, and
so I certainly think for those trying to draw a comparison between the
dotcom crash and now, I think they are clear differences which makes this
impossible.”

However, Weiner does concede that there has been a halo effect of the major
social web companies such as LinkedIn and Zynga enjoying huge valuations
post IPO, pushing up the valuations of earlier-stage web companies.

“I think there is clearly renewed interest in investing in earlier-stage
companies right now. If you talk to angel investors and early-stage venture
capital firms, I think they will tell you valuations are starting to move
up.

“But it’s important to double click on what the term ‘tech bubble’ means
and define what level of web company and quality of business we are talking
about, because it’s a real spectrum.”

Weiner, a former executive-in-residence at venture capital firms Accel
Partners and Greylock Partners – the latter an early-stage LinkedIn investor
– paints an interesting picture of how the control is now totally in the
hands of this new generation of social internet companies – which can choose
whether to float at all rather than when to, because of two new factors
which were not present during the first dotcom boom: deep- pocketed private
equity companies and the rise of the secondary shares market.

“I think 10 to15 years ago people were less inclined to ask why a company
was going public. If you could go public and the business was ready – I
think most companies did go public,” he explains.

“It’s only in recent times that you have this question, and I think it
happened because of Digital Sky Technologies-type deals [the Russian fund
has made major investments into the likes of Facebook and Zynga].

“Companies started to have a choice where they could raise cash without
going public, so the pendulum swung from if you were ready to go public to
why go public – because of these deep- pocketed private equity companies.”

Weiner also credits the rise of secondary markets for employees as another new
route through which companies can achieve liquidity without floating.
Facebook is a prime example of both phenomena. The social network’s hotly
anticipated circa $100bn IPO early next year will be more the result of US
securities regulations restricting the number of shareholders it can have
without listing as opposed to the need for capital.

So when asked why LinkedIn went public, with a limited float strategy, Weiner
lists the main benefits as increased liquidity, cash and equity. Which is
extremely helpful for an acquiring spree, such as LinkedIn is embarking on,
especially in the areas of recommendation technology and data analysis.

“Going public also has the ancillary benefits of a major marketing boost
– so you increase the mindshare of the company and its credibility – which
is very important when selling enterprise solutions to other businesses, as
we do,” he explains.

The immediate future for LinkedIn, Weiner says, focuses on investment back
into the company so that it can continue to scale its infrastructure, expand
internationally and increase its share of the display advertising sales
market and recruitment market.

LinkedIn makes its money in three ways: advertising, subscriptions and hiring
solutions – which allows recruiters to post jobs and locate “passive
and active candidates”.

In 2010, this revenue generator became the company’s “largest and fastest
growing business”, overtaking advertising in growth.

Weiner has promised investors that it can grow its share of the recruitment
market spend, estimated at $85bn, and sees LinkedIn’s addressable market as
roughly $27bn through heavily scaling up areas such as online jobs,
executive recruitment and recruitment media opportunities.

He took over the chief executive role from Reid Hoffman, the serial technology
investor who founded LinkedIn in December 2002 and remains executive
chairman. And he is keen to show similar sorts of open-minded thinking to
his predecessor, who retains an office at LinkedIn and remains a major
investor with a 21.7pc stake.

When asked what he says to those critics who don’t understand LinkedIn’s hype
– a typical criticism is that it is nothing more than a glorified digital
rolodex which would die a quick death if Facebook was to flick on a
professional tab for its 750m members – Weiner answers: “LinkedIn
is much more than that – it’s a mechanism that helps people be great at what
they do… via opportunities to outreach to potential clients through to
gathering competitive intelligence.

“We know that context matters and our members regularly tell us that they
want to keep their professional and personal lives separate. There is no
evidence that people want to fuse these identities on a predominantly social
network like Facebook.

“There are only a handful of these social platforms which have achieved
critical mass and scale. We are one of them and among those we are the only
one focused solely on professional context.”

This response comes in spite of several studies showing that increasing
numbers of people are using Facebook for professional networking purposes.

However, Weiner is open to the possibility of launching the LinkedIn
experience on Facebook through a third party app – displaying healthy levels
of business acumen in understanding that the world’s largest social network
is becoming a platform in itself on the web. But there are no definite plans
to make this type of integration a reality just yet, he hastens to add.

LinkedIn’s biggest challenges though are to remain increasingly relevant to
each user, despite its phenomenal growth, and to improve how regularly
members access the site’s service.

A recent survey by social media news site Mashable found that only 35pc of
LinkedIn’s membership access it on a daily basis, while 32pc visit the site
once a month. These figures are in stark contrast to sites such Facebook and
Twitter, whose members check a few times a day.

Weiner says the company has started to address the relevancy issue by
deploying increasingly smart algorithms to increase the relevance of
adverts, opportunities and information people are served – based on their
profile, likes and connections with others.

New tools, such as LinkedIn Today, a personalised news feed, and the ability
for members to apply for jobs online using their profiles on the
professional network, have both been recently launched in a bid to attract
more of its users to the site with greater frequency.

Weiner says data scientists and data tools have become the most valuable
people and features in Silicon Valley.

“The ability to extract useful signals from the stream of information is
key to success moving forward. This is why we are going to invest a lot in
this type of technology and capability. As long as we can apply correct,
relevant algorithms we can stay relevant to users. If you are unable to
create relevant experiences, you risk losing users.”

He wants to make sure users get offered relevant jobs, whether they are
looking or not, while equally offering recruiters only great candidates,
through powerful search technology. He says the company’s mission statement
is “to connect the world’s professionals to make them more successful
and productive”.

He also wants to increasingly target LinkedIn’s audience, who he describes as “prosumers”
– professional consumers – with consumer-style advertising and offers.

They are all logical and laudable ambitions for the biggest digital
professional network in the world, but first Weiner needs to make sure
members keep coming back as quickly as they sign up.

Jeff Weiner CV

Age 41

Education The Wharton School, University of Pennsylvania

Lives Menlo Park, California

Family wife Lisette, one child

Interests family, golf, charity work, including seats on the boards of
Malaria No More and DonorsChoose

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Heello – TwitPic Creators Turn The Tables On Twitter

You may not know this, but Twitter is actually not that great.   The website itself is clunky. Add-ons are what made it successful.   Sometimes Twitter has acquired them, like with TweetDeck, and sometimes they have created their own once the market has shown them to be popular.

The photo sharing website TwitPic started in 2008 as a way to share photos easily on Twitter.  Life was good, Twitter became popular.  Then Twitter announced its own photo-sharing services in June, with the added caveat that creators would own the rights to their photos so they can’t be redistributed without permission.   That makes Twitpic unessential, the same way Tweetdeck made TinyURL.com unessential.

But the TwitPic folks know a thing or two about building a successful property and can’t have been thrilled they were now unimportant to Twitter fans.  So they have started their own microblogging format, called Heello.   The nomenclature will be familiar to tech folks – a message, what Twitter calls a tweet – is a ping on Heello but a retweet is called an echo.    Now, it would seem that a retweet would call a ping, since a ping is essentially a hello, but that doesn’t matter, tweet is not actually a name that makes sense either.   If it works, it becomes the intuitive thing.

The advantage Heello may have?   From their site, you can simultaneously update Facebook and Twitter, which saves people time if they have marketing on multiple networks.   And there is a lot of marketing on Twitter.  I had to filter some people because not only do they spam the world with every blog post of their own, they spam us with all of their fellow corporate site blogs and then compendiums of the blogs, etc.  

But hey, I’m no dummy.  By all means follow me on Twitter!   We have no corporate marketing either so word of mouth is all we have.  I’d tell you my Heelloo URL but I keep getting a “There was an error loading this webpage. Please try again later” error when creating an account so Twitter is not worried just yet.

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