The social media marketing world is an interesting place. Just take a quick look at the top players and their business.
Facebook – Everyone wonders when the IPO will occur while the privately held company’s revenue numbers are talked and speculated about more than most public companies. Secondary market ‘trading’ of Facebook shares is the norm amongst the privileged. In the end, most people don’t know the truth about Facebook other than the warm fuzzy way that it handles its users’ privacy :-).
Twitter – It is still unclear just how and exactly how much money Twitter is making, can make or will make. Despite all the moves to look like an actual company it still gives off the feeling that it wouldn’t know a plan to generate revenue if one came up to it and kicked it in the shins.
Google+ – It’s a Google product so it is funded by Google’s paid search dollars. That was easy!
Then there is the little old, boring LinkedIn. The low hype social networking site that doesn’t have high profile corporate leadership, doesn’t do anything real ‘sexy’ as a product other than provide information to certain types of people that can be really useful for real world stuff.
Well, if their first quarter report as a public company is any indication, boring works especially in light of the rest of the news on a day when the economy of the US is in a shambles. SFGate.com reports
LinkedIn may have boosted the fortunes of the entire social-networking sector Thursday when the Mountain View firm surprised Wall Street by reporting a profit in its first-ever earnings report as a public company.
Some analysts had expected the professional social-networking firm to post a net loss of between 1 and 4 cents per share. But LinkedIn reported second-quarter net income of $4.5 million, about 4 cents per share, a slight increase from the $4.3 million for the same period last year when it was still a privately held firm.
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An interview by Fortune of LinkedIn’s CEO, Jeff Weiner, shows just how well things are going.
With 115.8 million members, a jump of 61% from a year earlier, the company is on a tear.
Fortune: Which of your three revenue streams—hiring solutions, marketing solutions (ad sales), and premium subscriptions—will be most important to the business going forward?
Weiner: We’re seeing strength across the board. While hiring solutions is showing continued momentum, we’re growing significantly faster in [ad sales] than the overall industry and will continue to take share there…and we’ll continue to invest in our ad sales team and generating more share of mind around our marketing solution products.
We also saw good momentum with premium subscriptions as a result of the overall lift [of membership] on the platform and some continued optimization of the existing product portfolio.
All of this is to say that while the world wants flash and excitement (actually maybe they don’t but we act like they do) what actually works is providing a useful service or suite of services that people will pay for. It’s that simple.
We seem to spend a lot of time confusing hype with reality in the Internet marketing space. We get caught up in the ‘celebrity’ of the space and wonder who is jumping to the top of the Google+ leaderboard or what Mark Zuckerberg ate for breakfast or whatever. We discuss all the cool ‘possibilities’ for various platforms and come off like technology beatniks clicking our fingers whenever some guru incorrectly predicts the future of communication in the modern age.
In the end, though, if these aren’t viable businesses that can sustain operations through their own revenue generation over the long term this is just chasing the wind.
LinkedIn seems to have figured out something with it’s dirt simple approach of “Hmmmm, let’s see. People need jobs. The economy kinda sucks but people need a way to try to succeed in this game. Maybe they could talk to each other about their work and careers and actually move themselves forward through a channel designed for just that purpose.” Brilliant!
Personally, I need to pay a lot more attention to what LinkedIn is actually doing and how it can help me professionally. I mean who cares about Mark Zuckerberg or which Silicon Valley hanger-on is topping the social media charts? Does that really help you get anything done? Nope.
So a tip of the hat to LinkedIn for doing something that the rest of the social media world seems to struggle with: building a business based on reality rather than hype.