Professional Affiliation Spaces

LinkedIn, Viadeo, Xing and BranchOutDave ColemanEamonn CareyGraham Colmer

Introduction to Professional Networking.

• What are Professional Affiliate Spaces or Professional Networks?

• What do they do and who uses them?• Used to network, build relationships, connect to peers and expert

groups and enhance employment opportunities. • Members use free or paid plans.• Businesses offer recruiting and advertising services to members.

• Who are the companies providing the service?• What was there before?• Web 1.0.• Offline recruitment .• Freemasonry?

I’ve never heard of most of those!

It’s all about numbers.• LinkedIn: born 2003, floated: May 2011, members: 150+ million. • Fact: Ireland has one of the highest LinkedIn penetration rates

worldwide.• “Share surge signals dotcom bubble 2.0”, The Guardian.

• Xing: born 2003, floated: Dec 2006, members: 11+ million. • Fact: Dominates German speaking regions (DACH)

•Viadeo: born 2004.• Members: 40+ million (2nd largest worldwide next to LinkedIn). • Fact: No.1 in China with 8+ million members.

•BranchOut: born July 2010.• Members: 3.5 million. • Fact: MC Hammer has no membership plan.

Show me the money!• How do professional networks make money?

Show me the money!• How LinkedIn’s revenue model has grown.

Oh, there’s the money.• IPO information:• LinkedIn listed at $45 in May 2011 now $92.• Xing listed at €30 in December 2006 now €49.

• Annual report data:• Viadeo and BranchOut are private companies.• LinkedIn made $63 million in 2011.• Xing made €20 million in 2011.

Oh, there’s the money.

But is that real money?• Apple has a Market Cap of 560billion.

• Net profit of 45 billion.• Net profit is 8% of its market cap

• Xing has a Market Cap of 268Million.• Net profit of 20 million.• Net profit is 7.4% of market cap.

• LinkedIn has a Market Cap of 9.4billion.• Net profit of 63 million.• Net Profit is 0.6% of market cap.

• It would take 12 years for Apple to pay for itself.• 13 years for Xing.• 149 years for LinkedIn.• Take a guess for Facebook?

Growing pains.• The four companies operate in the exact same market but

pursue different expansion strategies.• LinkedIn increases user-base in existing markets.• Viadeo targets the emerging markets through acquisitions:

• China (Tianji).• India (ApnaCircle).• South America (ICTnet).• Canada (UNYK).

• Xing focus on their existing user-base and buying innovative services.

• BranchOut grows symbiotically with Facebook.

It’s tough to scale!• System architecture is struggling to keep up with the rate at

which the network grows. • Over 2 new LinkedIn members per second. • Extra engineers are being employed to focus on site speed and

reliability.• The now defunct Friendster network could not scale to meet

the demands of its users. • Pages taking up to 30 seconds to load. • Users moved to other sites such as Bebo and MySpace.

Surely it can’t last?• Big competition to break into each others markets.• BranchOut’s dependency on Facebook for their user-base.• Smaller networks threatenend by LinkedIn taking their market

share.• Viadeo’s aggressive expansion in BRIC (Brazil, Russia, India,

China).• Chinese market - will LinkedIn or Viadeo succeed there?• Political• Censorship• Cultural• Design• Incumbents (Wealink, RenHE)

Back to the future.• Popular recruitment websites such as Monster are gradually

being super-seeded by professional networks. Recruitment agents can connect directly with potential candidates and also search based on their skillset.• Other competitors like Amazon, Microsoft, Google+ (Gmail

being a corporate email system now and Hangouts) • Future of professional networks is unclear, still a relatively

young industry.• User concern about privacy is growing as is their desire to keep

their professional and social lives totally separate. This is a potential downfall for BranchOut.

Back to the future.• Recruitment website’s being super-seeded by professional

networks.• Growing concern over online privacy.• Professional Networking is still a relatively young industry. It is

unclear at this stage what the future holds for this industry.