NETWORKING
LinkedIn looks to avoid privacy problems
Last Updated: Wednesday, May 19, 2010 | 4:46 PM ET
By Peter Nowak, CBC News
Arvind Rajan, LinkedIn vice-president of international operations, says his website has been profitable since 2007. (CBC)Is LinkedIn destined for the same sort of privacy backlash being experienced by fellow social-networking site Facebook? Not necessarily, a LinkedIn executive says, mainly because the two sites have entirely different users.
LinkedIn, based in offices just a stone's throw from Google's headquarters in Mountain View, Calif., launched its website in 2003 as a place for professionals to network. Since its inception, the site's purpose has always been distinctly different from the likes of Facebook and MySpace in that it has discouraged the "social" aspect of social networking. On LinkedIn, it's all business.
"It's not about your personal life or your social life, it's about your professional engagement and success," said Arvind Rajan, LinkedIn's vice-president of international operations, who was in Toronto on Wednesday to give a keynote talk at the annual Mesh web conference. "That, by its very nature, helps us differentiate ourselves from other social networks."
Most of the site's 65 million users — two million in Canada — use LinkedIn to connect with other professionals, whether they're searching for jobs or for answers to business problems. They tend to leave out things like photos of family members and status updates unrelated to work. They're also generally older and wealthier than Facebook and MySpace users, with an average age of 41 and household income over $100,000 a year, Rajan said.
Most don't actually use the site to look for jobs but rather to find new customers and solve issues they may be facing, often through joining specialized business groups. One member, for example, recently asked a group how he could ship 10 tonnes of steel from Beijing to Dubai and he "got answers from some of the world's best shipping experts," Rajan said.
The "high-quality answers" and professional focus could prove to be the secret to staying away from the sort of backlash Facebook is now seeing, where a growing number of users are threatening to quit over what they perceive as privacy violations by the site. Most LinkedIn users only disclose the information they want others to know, he said.
"Everything you do on LinkedIn is tied to your professional identity and brand," Rajan said. "Nothing's anonymous. Because of that, people are pretty careful about what they say because they don't want to look uninformed."
The site is also different from other social-networking services in that it actually makes money, having achieved profitability in 2007.
Since its early days, LinkedIn has drawn on three main revenue streams: selling access to large recruiting firms, targeted advertising and subscriptions that are aimed at so-called "outbound professionals," such as journalists or venture capitalists or people who often need to connect with other people they don't know.
“It hasn’t been about building a network and figuring things out," Rajan said. "We figured things out a long time ago.”
The company has experienced huge growth, going from 60 employees at the beginning of 2007 to an expected 900 by the end of this year. International expansion is part of that growth, with the site now operating in 200 countries.
Aside from speaking at the Mesh conference, Rajan was also in Toronto to interview prospective employees and scout locations for an office. The company aims to have a Canadian staff of five or six up and working soon, mainly in a sales and marketing capacity.
With 65 million members, LinkedIn is big — but it's also a far cry from the critical mass of Facebook's 400 million users. Facebook hit 100 million users almost two years ago, a time when privacy concerns were only starting to emerge, so LinkedIn is bound to experience problems it hasn't yet foreseen.
For now, Rajan said, the focus is on managing the company's quick growth and expansion, and the attendant staffing and spacing requirements that go with it.
"It's a high-class problem to have, but that doesn't mean it's not a problem," he said.
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