Less Is More: Lessons from LinkedIn
While pundits debate the valuation of Facebook, Twitter and other high-visibility social media sites—some wondering if there is a viable revenue model somewhere to be discovered—LinkedIn has been quietly profitable since 2007. Not bad for an Internet business born right after the bubble, in 2003. As Reid Hoffman, founder and chairman, explained in a recent interview, LinkedIn’s strategy is founded on two core tenets: unflinching focus on the needs of the target audience (the business professional) and a diversified revenue model. While other social media sites look for ways to keep their users on the site, LinkedIn understands time limitations for the business professional, and looks for ways to help people get what they need from the site as quickly as possible. But that does not preclude LinkedIn from actively accumulating details about its audience (e.g., through quick polls), which in turn improves its advertisers’ ability to fine-tune targets and messages. As to the diversified revenue model, I spend more time on Twitter, but I shell out $195 a year to be a member on LinkedIn.