Why LinkedIn might fail

Posted on April 17, 2018

 

Over the past few weeks I have been putting together material for a social media day. The day will be attended by local businesses and it will cover the essentials of using Facebook, Twitter and LinkedIn for business use.

Over the last few years, at Engage Web, we have conducted various seminars for Twitter and LinkedIn, so we have a volume of information, stats and exercises from which to draw. Facebook is a newer entity for one of our seminars, so that has been taking more time as the information has had to be compiled from scratch.

You may think, therefore, that Facebook has taken more preparation time. Not so. LinkedIn, due to its purchase by Microsoft in 2016 and the complete redesign of how its features work, has meant our material has had to be completely overhauled. So much so, in fact, that I’ve become increasingly frustrated with how useful LinkedIn ‘used’ to be compared with how it actually ‘is’ now.
I don’t know what Microsoft intended when they purchased LinkedIn, but they seem to have gone out of their way to make it worse. In fact, the demise of LinkedIn (as that’s how I see it going) reminds me of the depressing end of another social media giant from around the same time: Friends Reunited.

Friends Reunited was founded before LinkedIn, in 2000 compared with LinkedIn’s 2002. Like LinkedIn it proved very popular in terms of attracting members, and had amassed over 23 million in its prime (some way behind LinkedIn today, it must be said). Like with LinkedIn, one of its primary benefits was the ability to look for jobs, and it marketed itself as something of a job search and recruitment tool.

However, Friends Reunited made one fatal flaw – it charged members to contact each other. If you wanted to send messages to anyone else, you needed to pay a £7.50 annual subscription. This may sound like a nominal fee, and to many it was. However, for the use of a website, it was something many people just weren’t prepared to do.

Paying for a premium account? Sound familiar? That’s right, LinkedIn does the same thing – however the revenue earned by LinkedIn for its premium accounts makes up a small portion of the business’ revenue. The majority comes from advertising because of the huge data the site contains is valuable to companies and individuals wanting to promote targeted adverts to the right people.

Back to Friends Reunited. With people having to pay in order to message other members, the website was fairly pointless as a communication tool unless you paid money. That didn’t stop ITV purchasing the website for £120m in 2005, with further payments of £55m to follow. Quite a gamble indeed.

Then came Facebook in 2006. The young, hip, trendy social network from the US that was, most importantly, free. With Facebook you could message anyone you wanted, without any nasty subscription fee. Friends Reunited had lost its edge, and was losing its members. During 2007 Friends Reunited lost nearly 50% of its unique users, causing the website to drop the subscription fee. This was too little, too late. Facebook had already signed the death warrant of Friends Reunited.

The website was sold again in 2009 for just £25m, a loss of £150m, and has now closed down.

So what of LinkedIn? Like Friends Reunited, LinkedIn has a lot of members and charges subscription fees to message people who are not your first or second degree connections. A lot of useful features of the website have been removed, reducing its effectiveness for businesses.

For example, you used to be able to set up ‘services’ for your business profile page and request people recommend you for those services, leaving reviews. Facebook and Google Business have similar features, and they’re very good. At Engage Web, we built up a number of service recommendations from clients. Then, one day, LinkedIn decided it was scrapping them. Businesses were given a few weeks’ notice to ‘save’ them somehow before LinkedIn deleted them. Permanently.

You couldn’t even save them on LinkedIn. You couldn’t transfer them to personal accounts, or to the main business page. They were just being deleted. LinkedIn suggested you save them into Word documents. Very useful.

There was also a feature when you could share an update by your company page onto your personal profile, in much the same way as you can do with Facebook. It wasn’t an easy thing to do, and required a detailed explanation of how to do it such as the one I wrote here, but it could be done. Then LinkedIn stopped that – they made it so you could no longer do it.

This raised the question of what is the point in a LinkedIn company page? In my opinion, very little it would seem.

What is the point in endorsements? I have received endorsements from people I’ve never met for skills I don’t have. Why? Because LinkedIn suggests you endorse people when you log on to the site. If you endorse someone, they’re more likely to endorse you back. That is true, so what stock can you place in endorsements? None. You have hundreds of millions of people going around clicking ‘endorse’ for people they don’t know for skills they have no idea if they even possess.
Well done LinkedIn. That’s useful.

LinkedIn has the users, over 450 million by recent figures, and it has the data. People tell it what they do for a living, who they do it for and what experience they have had. However, it’s making the same mistake Friends Reunited made and scraping around for subscription fees from its members, when that doesn’t make up much of its revenue and the real value is in the data. It’s always been in the data.

Facebook knows this, as Zuckerberg has recently had to explain to a senate committee. If LinkedIn doesn’t drop the membership fees for premium accounts sooner rather than later, and stop removing some of the most useful features, something else will come along that is more useful, easier to use and free. If it does, Microsoft’s huge investment in the social networking giant will go the way of ITV’s.

Darren Jamieson

Technical Director at Engage Web
Darren is Technical Director at Engage Web, as well as being a co-founder of the company. He takes a hands-on approach to SEO and web design, helped by more than 15 years’ experience in these fields.

Like us on Facebook to see more posts like this

You might also be interested in:

No Comments »

There are no comments on this yet, be the first to write a comment.

RSS feed for comments on this post. TrackBack URL

Have your say!

Call Now Button

We have worked with:

minute-man-press-image
TEL: 0345 621 4321