Emerging Technology

BEST OF THE WEB: How your resume helped LinkedIn’s value grow $4.7 billion

Patrick Stafford /

It’s been a tough year for social networks. When Facebook finally went public in May, the news was focused on one thing – its shares plummeting 17% during its first few days on the market. Hardly a message to be proud of.

And yet, few have noticed that during the current year, another social network’s shares skyrocketed 64%.In that time, the company’s value has grown $4.7 billion to a market cap of $11.2 billion.

LinkedIn has been the dark horse in social networking since Facebook came along, but as this piece on Forbes points out, it doesn’t like to be associated with Zuckerberg’s machine.

And with good reason. The company is now estimated to make a profit worth $US70 million this year, after recording a loss of $4.5 million just a few years ago.

Chief executive Jeff Weiner attributes this success to one thing – recruitment.

In the past few years, Weiner started pushing premium services to talent scouts, priced per user. Now, as the story points out, thousands of companies are using LinkedIn as a source for high-skilled individuals. And it’s put the company in a premium position.

“In human resources departments, having your own Recruiter account is like being a bond trader with a Bloomberg terminal – it’s the expensive, must-have tool that denotes you’re a player.”

We often tend to forget about LinkedIn, thinking it’s just the “social network for professionals”. But as this piece points out, recruiters are viewing LinkedIn as a serious tool, not just a waste of time.

The importance of the Recruiter tool is highlighted in the company as well, with some of the best salespeople earning $400,000 a year.

“And unlike at other Silicon Valley companies, where engineers rank as alpha dogs, LinkedIn’s salespeople pull off the most daring stunts. Sales-effectiveness leader Nate Bride once dyed his hair blue to match the LinkedIn logo – and shaved small parts of his skull to spell out the company name.”

What’s even more fascinating is how aggressive the company is at this. During the past year, it increased its total spend on marketing and sales to 33% – Microsoft spends 20% and Facebook spends just 15%.

But Weiner defends the practice, saying the result has been “off the charts” as customers keep coming back for more. The bottom line – LinkedIn recruitment tools get results.

Adobe is a perfect example.

“A typical user is Trisha Colton, who leads Adobe’s hunt for digital media executives. On a recent afternoon, she needed to fill five positions.”

“With a few clicks of the mouse on her ThinkPad laptop, she could tailor a project-manager search that enabled her to look at possible candidates from 21 leading ad agencies, 15 publishing outfits and a host of other suitable backgrounds.”

Within moments, Colton had specified the types of jobs she needed filled – and had come up with 148 prospective candidates.

It’s recruitment made easy, and it’s making LinkedIn a fortune.

The amateurs taking over on YouTube

The rise of YouTube’s popularity has provided for all sorts of hilarious and impressive moments, with users now given a place to promote their amateur videos in front of a huge audience.

What’s even more impressive is that some of these amateurs have actually managed to produce some innovative and gripping content. These people, “YouTube celebrities”, are gaining huge followings, and in some cases, are even making enough money through advertising to quit their normal jobs.

In fact, as The New York Times points out, it might be more common than you think – with hundreds of people now earning more than six figures a year from their videos.

YouTube executives sometimes refer to such YouTube stars as having been “born on the platform: they built careers through skilful use of YouTube itself.”

“Given the numbers of viewers involved, it makes sense that YouTube, which places revenue-generating ads on videos, might take an interest in creating more of these stars.”

It’s easy enough to understand. There are plenty of talented people who, before YouTube, didn’t have an avenue to show off their content. Now, they’re creating videos in all sorts of categories, and if they’re good, are gaining huge followings.

And now, YouTube wants to promote them even more.

“This was the goal of Next Up, to which several hundred YouTubers applied. While the final selection process was murky, I was told that the winners were chosen based more on metrics (views per video, subscriber growth rate, uploads per month) and ability to whip up fan support than with some entertainment executive’s opinion about quality.”

It’s a significant change in how media companies judge quality. With YouTube “celebrities”, they aren’t taking a punt – these people already have audiences they built themselves – and it’s changing the way we’ll consume content forever.

The NFC problem that doesn’t exist

Everyone’s very excited about the prospect of Apple including NFC in its new iPhone. After all, the idea of combining a wallet with a phone makes even more sense in such a highly connected world.

But there’s an interesting piece over at TechCrunch that makes the argument the inclusion of NFC in new phones doesn’t make quite as much sense as we think it does. In fact, it may be an answer to a problem that doesn’t exist.

“For one, the motion itself should be no different. It’s not like contactless payments via mobile is a more physically efficient form of living and transacting.”

“You grab your credit card out of your wallet in your pocket, and swipe it through the reader (or in some cases tap it, just like the phone). In the case of NFC, you grab your phone out of your pocket, open Google Wallet (or whatever), and tap it to the reader. It’s the same exact motion.”

With Apple about to release its new iPhone, and some rumours already suggesting 2012 will be the year it includes NFC, this is a timely argument – and one that may end up being right if consumers don’t jump on the technology quick enough.

Five years since the iPhone – how did it succeed?

The iPhone is five years old this month. It seems like it was only yesterday Steve Jobs was showing off the gadget in 2007, confirming months of rumours the company would be producing a phone.

It’s hard to imagine now, but at the time, the iPhone was actually met with a lot of scepticism. In fact, there were plenty of people saying that it would fail.

But as John Gruber points out at Daring Fireball, these forecasters failed to take into account that Apple wasn’t actually making a phone. It was making a pocket computer.

“The iPod was the world’s best portable media player; the “iPhone”, thus, would likely be the world’s best cell phone.”

“But that’s not what it was. It was the world’s best portable computer. Best not in the sense of being the most powerful, or the fastest, or the most-efficient to use. The thing couldn’t even do copy-and-paste. It was the best because it was always there, always on, always just a button-push away.”

Now, Apple controls a huge chunk of the mobile market, but not because it made a phone – because it made a device that made the phone outdated.

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Patrick Stafford

Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.

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