LinkedIn is positioned to become the first global economic graph with the ability to mine the transactions of an emerging data economy. That’s the conclusion of a study by faberNovel, which has published the results of its work with a detailed 127-slide report titled: LinkedIn, The Serious Network.
FaberNovel, which calls itself an international innovation agency, has a history of doing reports about the tech giants. As Ingrid Lunden wrote, last year it examined why Facebook at that time was the perfect startup. And in years past, the firm has published reports about how Amazon controls e-commerce, how Apple dominates, and what could go wrong with Google.
The company chose Linkedin for its expertise in data analytics and algorithms, which has helped LinkedIn become far more than a site to post a resume. Instead, FaberNovel argues, LinkedIn is positioned to become a mega business platform. Since its start 10 years ago, LinkedIn has become the place for people to network. In recent years, though, it has started pooling the data, becoming one of the early adopters of open-source data technologies, such as Hadoop and Lucene/Solr for search. It has one of the most-recognized teams of data scientists who have learned to shape the data to create what CEO Jeff Weiner calls a global economic graph. It’s through the understanding of its users’ interactions that LinekdIn is establishing a platform that could put it in a position to emerge as an enterprise services provider and a player in the CRM market.
LinkedIn understands the new concepts of business, particularly the transition from hierarchical to network-based organizations. The trend is to treat business as a graph more than a top-down organization with centralized communications and infrastructure.
The company is adapting to this change in how an organization functions by focusing on talent as the center of its network. This provides the basis for developing products and services that span recruitment, as well as the expansion into the CRM and media markets.
FaberNovel argues that the data LinkedIn collects and efficiently analyzes will help the company realize what LinkedIn CEO Jeff Weiner calls the company’s dream to create an economic graph that identifies the connections in its vast talent network. It’s by connecting the data that LinkedIn will continue to better its real-time analysis.
LinkedIn is still small compared to its competitors in terms of revenue, but it is the fastest-growing talent network in the world with 225 million members.
The company has built a network of members, recruiters, marketers and business partners. It is from this base that it is using APIs to drive integrations and establish a “business-as-a-service,” platform. The company has already succeeded in ruling the recruitment market by simplifying the process for finding employees. Companies using LinkedIn pay a fraction of the cost that they would have to pay recruiters.
LinkedIn is becoming an enterprise SaaS provider with almost 50 percent of revenues coming from its talent solutions business. Using a rapid development cycle, LinkedIn continually offers premium services to see what has most resonance. Using this model, LinkedIn has extended into sales management with its Sales Navigator tool. It can be expected that the company will offfer additional services that it builds out into into SaaS-style offerings.
The company is building for its future with 100 percent year-over-year increases in sales and marketing. It invests 25 percent of its revenues in product development. In 2011, it launched an effort called Project in Version to re-architect its code. The company now updates its code three times a day, compared to Google or Facebook which update either once a day or every few days. It is also focused on strategic acquisitions, making nine purchases since August 2010. Slideshare, Pulse and Rapportive are meant to help the comlany become more of a social network. The goal: get people at work to use LinkedIn throughout the day as source for work needs and insights.
LinkedIn is positioning itself to become the ultimate business platform. FaberNovel says its challenges are in security. The company leaked 6.5 million passwords last June. To earn the trust of business these days means having the security chops that show you can handle their trusted data.