LinkedIn Corp (NYSE:LNKD)’s premium service has been able to grow its revenue by 73% year-over-year. The premium service allows a member to private message someone out of their extended network. The implications for this are enormous as it gives an average person the ability to contact the head of HR at Boston Consulting Group, Goldman Sachs Group, Inc. (NYSE:GS), and perhaps even Google Inc (NASDAQ:GOOG).
Project proposals and ideas by a consultant can be sent to the right person in an internal organization. After all, organizations are mired in bureaucracy, and getting the right information to the right person can be paramount to landing a multi-thousand dollar consulting opportunity.
LinkedIn’s competitive environment
Facebook Inc (NASDAQ:FB) totally ignores the employment solutions, or premium membership distribution method. In fact, Facebook’s sole focus is on revenue generation through advertising. Facebook Inc (NASDAQ:FB) isn’t a direct competitor to LinkedIn Corp (NYSE:LNKD) despite both being social networks. Facebook Inc (NASDAQ:FB)’s primary market is the average consumer who wants to connect with close friends and family.
The two social networks are in direct conflict with each other, but in a good way. No one would want to show their Facebook Inc (NASDAQ:FB) profile to the HR guy. Likewise, no one on LinkedIn is updating their news feeds with information pertaining to kids, families, and holiday-driven events.
Google+ falls far behind LinkedIn and Facebook Inc (NASDAQ:FB) in terms of growth. Google Inc (NASDAQ:GOOG) relies on its inter-connected network of Google Inc (NASDAQ:GOOG) services based on either a YouTube account or a Gmail account in order to inflate its Google+ user statistics. Not to mention, Google+ doesn’t have enough users, which limits economies of scale. I can find a vast majority of my friends on Facebook Inc (NASDAQ:FB), whereas with Google+ I can only find a limited number of them.
According to business insider, Google Inc (NASDAQ:GOOG) has been able to increase its user figures by 33% from the end of June 2012. Google+ has 135 million active users when compared to Facebook’s 1.11 billion monthly active users figure and LinkedIn’s 218.3 million user figures. Facebook is far ahead, with LinkedIn Corp (NYSE:LNKD) well ahead even though LinkedIn is extremely differentiated from both Google+ and Facebook.
Conclusion
Social networks are good at one thing but bad at the other. Google+ is the weakest social network. It falls behind on both social interaction and practicality. It isn’t aimed at a practical purpose, and it isn’t differentiated enough like Twitter to dominate its own niche. Investors in Google Inc (NASDAQ:GOOG) should not rely on Google+ for incremental revenue growth, despite the hype surrounding it.
The article Facebook and LinkedIn Can Both Co-Exist Without Google+ originally appeared on Fool.com is written by Alexander Cho.
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