Facebook Inc (FB) Versus LinkedIn Corp (LNKD): A Breakdown Of The Battle

Growth prospects

According to different surveys and media reports, many Facebook users are starting to lose interest in the social network and spending more time in networks like and among others. From The Guardian:

In the last month, the world’s largest social network has lost 6 million US visitors, a 4% fall, according to analysis firm SocialBakers. In the UK, 1.4 million fewer users checked in last month, a fall of 4.5%. The declines are sustained. In the last six months, Facebook has lost nearly 9 million monthly visitors in the US and 2 million in the UK

The number of minutes Americans spend on Facebook appears to be falling, too. The average was 121 minutes in December 2012, but that fell to 115 minutes in February, according to COMSCORE, Inc. (NASDAQ:SCOR).

The problem with Facebook is that the company needs high user engagement in order to monetize advertising opportunities, and some people, especially those erratic teenagers, seem to be losing interest in the social network. Facebook is not a novelty anymore, and it’s getting stuffed with parents and other relatives, so it’s not as cool as it once was.

The company is not going to die, it has become so big that everyone needs to be on Facebook, if only just to remain reachable and have access to the service, something similar to a utility in many ways. But for a business model depending on advertising, lower engagement could mean that growth will be materially slowing down in the middle term.

LinkedIn on the other hand, doesn’t need to be cool or novel. All it needs to be is the leading professional network in the world, and the company is strengthening its position as it becomes bigger and more relevant to professionals, hiring companies and recruiters.

The business will have its ups and downs in reaction to the economic cycle and its impact on the jobs market, but over the long term the company has the competitive strength to take advantage of its abundant opportunities for growth.

Bottom line

Facebook and LinkedIn are the two leading social networks, but that’s where the similarities end. Although Facebook is much bigger, LinkedIn has a stronger and more reliable business model, and the company is in a great position to capitalize growing demand for online hiring services in the long term. Facebook has more friends, but LinkedIn’s contacts are more valuable, so I’m picking quality versus quantity and staying with LinkedIn.

The article The Battle of the Social Networks: Facebook vs. LinkedIn originally appeared on Fool.com and is written by Andrés Cardenal.

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