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LinkedIn future

The future of LinkedIn

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I used to hate the LinkedIn platform. More explained in this Linkedin blogpost. I’m still convinced of the business case of LinkedIn with three different revenue streams. So I did what I wrote before:

“Best thing to do is short Facebook and go long LinkedIn – be market neutral with these high levels of valuation.”

And yes that is still a position with red numbers.

Since then I have read more about LinkedIn, used it more. Even advertised on LInkedIn for some customers. And for the time being: This is a perfect business network. They still irritate me when using it. But it develops, and is getting better over time. Mobile works great. I love Slideshare. And at the same time I don’t see all my friends on the platform. That is a huge negative.

LinkedIn information

What I find really strong is that with founding LinkedIn all current steps where already mentioned by its founder. Reid Hoffman explains it perfectly in this blogpost and slideshare.

And now I just came across this video below from the current LinkedIn CEO, Jeff Weiner. Explaining where Linkedin currently stands and how it sees the future. Or better, the next ten years.

The LinkedIn platform gains more and more ground to be a business content publisher, and is currently rolling out the option to have your personal blog on your profile. LinkedIn wants to make an economic graph of the world. It can do so if it continues to attract working professionals. “We simple need scale”. 

And I guess that is what is the biggest challenge for LinkedIn. Getting a better footprint in Asia. Besides India that is currently the second biggest country on the LinkedIn list.

So far it is fulfilling its mission: connect the world’s professionals to make them more productive and successful. 

Stockprice

The absurt high levels of $240 per share were too much the last time I wrote about LinkedIn. Now at a price of $140,- it is still high but more reasonable. LinkedIn current value is 17 billion dollar. Around the price Facebook paid for WhatsApp, (although that price also came down with Facebook shares being down 20%). But LinkedIn also got more than 2 billion on cash reserves. 

So if I calculate with a enterprise value of 15 billion than each member is currently valued at 50 dollar (Facebook $110).  But also a market value of 10 times revenues. Far from cheap. But I see many more revenue streams from this business network. A B2B lead is simply far more valuable than all Facebook advertising could bring in imho. Facebook has a really big lock-in with Facebook.com, Instagram & WhatsApp. But a professional network takes longer to build up. And so there is also a lock-in. Up to you if the user life time value (LTV) is above $50. The Future will decide.

Disclaimer: Long Linkedin < short position Facebook. 

CEO impact

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It will normally take three years for a CEO to see his or her hand of the decisions he/she made during their leadership. Not if you bring along a lot of expectations. It took Jobs a lot of time to repair his Apple company. He came back in 1996, but it was only visible in 1999 (during the internet bubble) that Apple stock went up. (This is also an argument that doesn’t work for those short term bonuses.)

And sometimes is it quickly visible that a CEO has a negative impact on the companie value.

apple graph

Almost three years after mister Jobs died, Apple announced again a new iPad and other products. TIm Cook is a long time CEO now. But the time Jobs ruled the company is just a bit longer than three years. It is the pure magic of the current Apple team, not any longer a flavour of Jobs. Is it accidental that the stock has peaked and is almost 30% down from it’s top on 700 dollar.

The magic is still there. But not on the highest level that used to be the case. While Apple and the valuation of the company gives no space for mistakes or a lower margin. The profit margin is huge right now. And difficult to keep this high for very long time in such a competitive space.

 

Online storage & Murphy’s law

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I want to be device independent and don’t want to wear any hardware on me for any data. Yeah, the cloud. Such a lovely place. It is the place for me fo:

  • Email (duh)
  • Upload my pictures immediately when I go into a wifi connection with Dropbox.
  • Address book in contacts.google.com (still searching for what once GIST.com could do, my personal social CRM)
  • All my notes i write in Evernote (changed it from Google Drive – much easier to connect with f.e. IFTTT, easy to search and )
  • All my documents in Dropbox. All Sync on
  • To do list / actionlist with rememberthemilk
  • My music playlist is on Spotify- access all the time.

And that has an impact on:

Paper is gone.

Search is really important. Everything can be archieved.

Place is irrelevant. Place is not important anymore; no matter where you are. You can do what you want to do with an computer, machine, smartphone or whatever.
(That’s what i also like the cleanness of a Chromebook. in 10 seconds it is in full working mode. almost no local storage, all online) 

Internet must be perfect.

And because of that we can be really efficient, but at the same time Murphy’s Law will be more likely because we assume to be so efficient.