LinkedIn: First the IPO; Now the Shopping Spree?
Sonar.me didn’t win this week’s competitive TechCrunch Disrupt contest, but the company would make a plum prize for another organization: LinkedIn.
The young, New York-based startup makes a mobile application that shows users who in a room they’re connected to on social media networks, then allows them to message those contacts. You can’t make it much easier to get a conversation started than that.
As Sonar.me’s CEO Brett Martin explained in an interview last month: “There’s this overall problem of bridging the gap between cyberspace and meatspace. I’ve got all these Twitter followers and I wouldn’t necessarily recognize them if they are in the room, but if I could solidify that relationship with a handshake and a conversation…if I knew to look for them, I’d be a lot better prepared.”
LinkedIn has an almost shockingly limited history of acquisitions. Since its 2003 founding, the company has publicly disclosed just three acquisitions: CardMunch, a mobile application that automatically transcribes and then electronically stores business cards; mSpoke, a developer of a recommendation technology; and ChoiceVendor, which provided Yelp-like reviews about businesses until getting absorbed by LinkedIn last year. (All three acquisitions have taken place in the last 18 months.)
Not everyone thinks that needs to change, either. I talked earlier this week with social media analyst Lou Kerner of Wedbush Securities. He told me he thinks LinkedIn can grow its membership base and revenue “at a significant rate” by continuing on its current path.
But the enormous success of LinkedIn’s IPO has given it both the resources and the reason to start shopping. Let’s face it: there’s a lot of growth priced into its current, $8 billion valuation.
Kerner observed to me that LinkedIn simply “isn’t as significant a technology place as Facebook is.” Whereas Facebook’s penchant for acquiring nascent startups has become renowned, “I don’t think LinkedIn’s ambitions are quite as far reaching,” he says.
Still, even Kerner admits that LinkedIn could use some outside help, noting that should LinkedIn start buying, among the technologies it would make sense to consider are those of “companies that know how to build large audiences on Facebook. You have people who have 30 million fans on the platform. There’s a competency in aggregating that size audience.”
Kerner also thinks LinkedIn could be “well served in buying companies with expertise in their vertical on Facebook.”
One such company would be San Francisco-based BranchOut, which leverages Facebook to help people find business connections.
Certainly, the company would mark a major departure for LinkedIn, whose acquisitions so far have been in the sub $10 million range. While BranchOut is still building up its base of users, it’s already expensive, relatively speaking. Since its founding last summer, it has raised $24 million – much of it earlier this month. (Facebook could also make life difficult for the startup if LinkedIn became its parent company. Facebook doesn’t take a cut of BranchOut’s revenue right now, as its CEO, Rick Marini, told me recently. But I’d guess Facebook would start.)
Work4 Labs — another San Francisco-based social media startup that’s trying to leverage Facebook to help businesses recruit job candidates — might make more sense. It’s cheap by comparison. So far, it has only received seed funding by French angel investors Stephane Le Viet and Gautier Machelon.
And it seems to be gaining traction and acclaim. Work4 Labs says that thousands of companies have added its “Work for Us” tab to their Facebook fan pages. Meanwhile, according to InsideFacebook.com, which covers the platform closely, Work4 Labs has “improved its Work For Us page tab app with impressive relevancy algorithms that suggest [to] users jobs they’re qualified for and friends they should recommend openings to.” (The blog called BranchOut’s application “very basic” in comparison.)
One way or another, it will be interesting to see what happens in coming months. While I’d love to see LinkedIn do more to capitalize on talent from the outside – I like Sonar.me particularly — investors seem to view the company’s measured approach as a positive for now.
“It’s really important to recognize that it’s remarkably early,” says Kerner. “If you look at social media as new media form — if you compare it to television – “I Love Lucy” hasn’t even started airing yet.”
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Araç Takip Sistemleri said on May 30, 2011
LinkedIn is really an interesting company because they did not know that their users were mainly from outside the U.S when they first started. I wonder how much revenue they generate now outside the states.
Solar Breeze | Floating Pool Skimmer said on June 1, 2011
LinkedIn is a sleeping giant. To me, it provides far more professional benefit than any other social platform.