I’m experiencing one of those a ha moments that may not make it into the annals of history, but I claim all the same. The team on Bloomberg Surveillance chatted a bit about the big three social networks: Facebook, LinkedIn, and Twitter. One of the hosts, Tom Keene, described LinkedIn as a winner while giving Facebook mixed reviews. His analysis was based primarily on LinkedIn’s overall stock performance since it went public two years ago. I think LinkedIn is the better play also simply based on the value of its content. Specifically, the value that is derived from the quality connections people expect to make on LinkedIn versus Facebook.
People use LinkedIn to connect with individuals that may lead them to job or other business opportunities. The site also markets itself to job recruiters looking for ideal candidates. LinkedIn plays a role in maximizing income and wealth for the subscriber. Facebook simply doesn’t do that. It is still the bulletin board that is hung up in a dorm room where Kim can tell Sally about the sorority party next week.
What Facebook needs to do, if it wants to stick with its advertising model, is to create events. Facebook is like a night club. People show up for the entertainment. Real swank clubs have corporate sponsors for an evening underwriting events while hawking their wares. Facebook has one billion potential MCs and DJs on its site and plenty of sponsors that are willing to hawk their wares around them. This is how Facebook will be able to generate more income.
As long as Zuckerberg is in charge, Facebook will never be a LinkedIn, and as the years progress, professionals will never look at Facebook as a rival to LinkedIn, but since Facebook doesn’t even want to take on more of a media company look, the club option may be its best bet.