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.
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.
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.