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by Krista Bradford (Originally published on ERE.net, the article has since been updated.)

LinkedIn Recruiting Trouble

As much as we in recruiting enjoy the many benefits of LinkedIn, there has been trouble in paradise. I’ve been a member of LinkedIn since the early days, to which my user ID (59572) will attest. Because LinkedIn numbers its members sequentially, if you do the math, you’ll find me counted among the first .012 percent of LinkedIn users.

However, shortly after LinkedIn took off, I noticed that what began as a business networking site was starting to feel more like a marketing and recruiting site dressed up as a social network. 

Others suggested it more resembled the proverbial wolf in sheep’s clothing, a digital beast that devoured our contacts and served them up to large corporate clients willing to pay for what was once our personal data.

LinkedIn Monetization

One cannot really blame LinkedIn for monetizing its business model. It did need to generate revenues to keep the lights on. But as it pursued recruiting revenues, as it encouraged business professionals to use LinkedIn more as a marketing platform for “brand you,” as it prodded users to pay for the privilege of networking and recruiting on LinkedIn, some users started to wonder what value we get in return for that investment. While LinkedIn remained a shiny object to which many recruiters felt inextricably drawn, we were in serious need of a reality check.

LinkedIn’s Unreliable Member Count

By 2011, LinkedIn reached two impressive milestones. It went public and it surpassed 100 million registered users. It has since reported grown to five times that amount. However, before LinkedIn went public, the social network filed a document with the SEC reporting a significant risk factor to LNKD investors: just how unreliable that member total is.

The number of our registered members is higher than the number of actual members, and a substantial majority of our page views are generated by a minority of our members. The number of registered members in our network is higher than the number of actual members because some members have multiple registrations, other members have died or become incapacitated, and others may have registered under fictitious names.

In other words, LinkedIn’s hundreds of millions user number is wildly inaccurate. However, attempting to pin down a more meaningful number is like nailing Jell-O to the wall. That is why, dag nab it, LinkedIn has stuck with its with its massive total. Flawed though it may be, it contends it’s the only number it’s got.

Given the challenges inherent in identifying these accounts, we do not have a reliable system to accurately identify the number of actual members, and thus we rely on the number of registered members as our measure of the size of our network. Further, a substantial majority of our members do not visit our website on a monthly basis, and a substantial majority of our page views are generated by a minority of our members.

Most LinkedIn Members Rarely Visit

In other words, a substantial majority of LinkedIn members rarely visit LinkedIn. That’s according to LinkedIn itself. Seriously, if that’s the case, one has to wonder how valuable LinkedIn is as a social network. LinkedIn has wondered as well:

If the number of our actual members does not meet our expectations or we are unable to increase the breadth and frequency of our visiting members, then our business may not grow as fast as we expect, which will harm our operating and financial results and may cause our stock price to decline.

The investor website Seeking Alpha has expressed concern about LinkedIn’s Marketing Solutions business — an advertising business unit that provides about a third of LinkedIn revenues — because “a website’s value to advertisers is directly proportionate to its number of active users.” Seeking Alpha even accused LinkedIn of being intentionally vague about its active user base and suggested we examine Quantcast reports on audience size instead. Only 1% of LinkedIn users are “addicts” who visit the site 30 or more times a month compared to Facebook’s 76%.

Squishy Member Totals Unsettles Investors

Bloomberg contributing editor and investor Paul Kedrosky has opined that LinkedIn has been broken from the beginning.

Kedrosky’s article was called to my attention by Gary Stock, a longtime friend, technologist, and former code-breaking cryptanalyst with the National Security Agency. Stock participates in an invitation-only discussion group called “The TBTF Irregulars.” The group was formed by technology journalist/physicist Keith Dawson and also features the likes of David Weinberger, co-author of the seminal book on social networking, The Cluetrain Manifesto, and author of Small Pieces, Loosely Joined. It other words, this is a group that takes social networking theory very seriously.

LinkedIn Losing Its Way

Gary noted there has been growing chatter among The Irregulars about how LinkedIn may be losing its way. They have observed that it was behaving more aggressively and hyperactively. Popup wizards online nagged us to enhance our profiles, to give up more and more pieces of ourselves. One Irregular noted an email from LinkedIn to confirm a connection suddenly mistook him for a new user, though he’d been a member for years, and attempted to raid his address book to send out new invitations to connect on LinkedIn. When he demurred, his friends still strangely got hit with those email invites. In other words, even though he said “no,” LinkedIn’s technology apparently said “yes.”

Those hiccups may have been due, in part, to the problems with iterative development, of rules and algorithms run amok as large platforms scale. However, it may have been that LinkedIn was undergoing a personality change.

Stock theorized that LinkedIn may have an “all-things-to-all-people” problem. He observed that LinkedIn once insisted we limit our networks to those whom we know and with whom we do business.

Gary being Gary, he took building quality connections in the beginning so seriously that when a college student that he knew attempted to connect with him on LinkedIn, he visited that student to explain personally why he could not make the student a connection: they had never worked together and were not even in the same industry. However, soon Gary realized that he did do business with the student. In fact, he had for several years. The student’s family sold produce at the local farmer’s market that Gary frequented. So Stock relaxed his rules, and it appears, LinkedIn has as well.

A Melange of Grey Goo

A network that first insisted that we network only with those we know has morphed into a place to network with those we want to know us.

For many, that transformation has turned the LinkedIn data stream into a torrent of less-meaningful data. Eventually, Stock predicted, LinkedIn may need to divide itself into separate businesses or risk becoming a “melange of gray goo that nobody recognizes anymore.” Instead, Microsoft acquired the company, and the rest, as they say, is history. I wonder if gray goo theory still applies.

For non-nerds, “grey goo” is a phrase first coined by nanotechnologist Eric Drexler in the 1986 book Engines of Creation. Grey goo is the result of an apocalyptic scenario in which rogue self-replicating robots consume all matter on earth while building more themselves. If it isn’t careful, LinkedIn may find itself turning into a large mass of replicating nanomachines (members) lacking large-scale structure (promiscuous networking). Yes, grey goo.

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