LinkedIn should be bigger than Facebook

Following in a long and venerable Microsoft tradition of paying big bucks for promising startups, and then quashing them under a single-minded corporate culture focused almost exclusively on Windows and Office, LinkedIn languished in big tech’s shadows after Microsoft acquired it for $26.2 billion in 2016. Just as it had done almost 20 years earlier in 1997, when Microsoft paid $500 million for Hotmail then wasted several years and millions of dollars trying to integrate it into Microsoft Office, without seeing Hotmail’s potential for becoming a completely new business, it has done little to enhance LinkedIn as a standalone social and business media platform.

Had Microsoft chosen, they could easily have outspent Yahoo in the 1990s and made Hotmail the dominant free email platform by growing it beyond email into a powerful online social media platform. However, they allowed Hotmail to fall behind Yahoo and later Gmail, losing its customer base, as it offered less storage memory and fewer features than its competitors.

Microsoft did it again in 2011 when it bought the internet telephony company Skype for an astonishing $8.5 billion! Most observers assumed, wrongly it turns out, that Microsoft planned to grow Skype’s 660 million users and market new services to them. However, Microsoft again squandered through mismanagement and underfunding, a golden opportunity to grow Skype into the dominant global text messaging and video conferencing application. Instead, it allowed much smaller startups like WhatsApp and later Zoom to takeover this consumer and business market. In fact, at the height of the pandemic in July 2020, when it should have been the video conferencing software of choice, Skype’s user base had plummeted by 85% to less than 100 million.

It’s hard to imagine how and why Microsoft’s corporate management are again missing an opportunity to create a whole new business out of the still dormant LinkedIn social media goldmine? For one thing, even though its users are about a third of Facebook’s nearly 3 billion users, their combined net worth is likely several times the combined net worth of Facebook’s users because, unlike Facebook, LinkedIn’s members are largely educated adult professionals with salaried jobs, while a significant portion of Facebook’s members are either too young or too old to be employed.

Combined with Skype, LinkedIn could become the premier messaging, file transfer and video conferencing service on the market, ahead of Zoom and WhatsApp

Nabil Alkhowaiter

More Importantly, the LinkedIn membership data base is exponentially richer in members’ personal details than any other data base in the tech world. Whether it’s Facebook, WhatsApp, Gmail or even Apple, none of them hold the resumes of whoever signs up for their services. These resumes reveal members’ life histories, including where they studied and worked, on top of their social connections and personal interests. The potential this opens up for selling specifically tailored products and services to individual LinkedIn members is huge.

This then brings us to the reason that LinkedIn has not been able to achieve its full financial potential as a global social media platform, which is a corporate mindset that sees it purely as a professional networking tool, while providing very little value to the majority of its members. This explains why its paying users are mainly HR departments and executive headhunters, who probably represent less than 2% of its registered membership.

To change this limited business model, LinkedIn needs to go beyond serving as a free professional networking database and become a hybrid social media platform that incorporates aspects of Facebook, WhatsApp, ZoomInfo and even Twitter. This does not mean it has to adopt the worst attributes of Facebook and Twitter to succeed, but it does need to step out of its self-imposed restriction on services that would make it look more like a social media platform. Such services could include the option to create personal and professional members’ groups, free storage space that can be used for websites, photos and videos, and a simple to use internal payment system between members. All these enhancements and more will necessarily increase traffic to the LinkedIn website and exponentially increase its ad revenue.

Finally, two critical LinkedIn services that are woefully inadequate are its search engine and its almost useless mobile app. The search engine is so weak that it cannot even be used to search for members using their names and educational or employment institutions. Perhaps adding Bing or even Google search to LinkedIn could solve that problem, because the current search engine returns far more names than if Google is used alone. As for the LinkedIn app, combining it with Skype could allow it to become the premier messaging, file transfer and video conferencing service on the market, ahead of Zoom and WhatsApp.

• Nabil Alkhowaiter is a failed serial entrepreneur and writer based in Dhahran, Saudi Arabia.