When a company goes public, there are suddenly all kinds of new demands and pressures. There are investors to please and constant revenue numbers that must be hit. If you’re the first in your industry to go public or the industry leader, you’ll have additional media scrutiny on every blip in your stock chart.
Some companies buckle under this pressure. So far, Facebook’s a good example of that. It hasn’t focused on the things that need doing (revamping its mobile application) and is changing things for the worse in a desperate scrabble to find revenue, any revenue. The site is throttling how often fan page content appears in fans’ newsfeeds, with most status updates reaching an all-time low of about 15% of fans–unless, of course, you want to pay to promote your content. Add that to other “huh?” inducing business decisions like allowing people to pay to promote content from their personal profiles as well, and it all paints a picture of a company that’s drowning.
Then you look at LinkedIn, and you see a totally different picture. You see a company who understands what it’s primary business is–a professional social network. They don’t try to be fun; they don’t try to be hip. They embrace the essential seriousness of their endeavor and focus narrowly on their professional niche. They’re revamping their products and services to give more value to customers not less. Take their recent redesign of the LinkedIn company pages. Sure, they’re cribbing a little from Facebook with the cover photo, but the overall emphasis is getting people to spend more time on the site, use it more so they’ll want to pay for additional advertising features, not taking away all alternatives for organic follower growth.
LinkedIn’s recent improvements don’t stop there. They’ve added a recent ability to follow users you aren’t connected to. You can’t message them or use their connections to make introductions, but you can see what Richard Branson or Arianna Huffington are talking about from a business perspective. It’s another page ripped from the Facebook playbook, with their subscribe function. Finally, they’ve added a smart and easy way to endorse people–vouch for a skill they have without taking the time to write a long, personal recommendation. It’s not as useful as the recommendation function, but it’s nice to see at a glance how others perceive someone’s expertise. Oh yeah, that idea’s liberally borrowed from Klout’s K+ function.
LinkedIn is not reinventing the wheel. It’s not trying to. What it is doing is watching very closely and adapting technologies to fit its narrow niche. It’s working to keep its current customers happy and providing them with added reasons to stick around on the site instead of pissing off its business customers.
And that’s why LinkedIn’s stock price hovers around $120 a share, while Facebook can barely break $20 a share.