300 Million Ain't Nothing But A Number

LinkedIn announced last week that they’d reached a milestone of 300 million users, which is pretty impressive, considering that means that their online population pretty much parallels that of the United States.

This comes about 5 quarters after reaching 200 million users in January 2013, impressive growth considering that LinkedIn, founded in 2003, only celebrated its 100 millionth user in March 2011. 

That means that in 14 months, the site managed to drive as many sign-ups as the previous 8 years combined.

Those numbers are objectively impressive, but LinkedIn’s growth is in fact underwhelming when compared against other public companies in the social network space - although granted, 100 miilion new registered users in 14 months is beyond the realm of comprehension for most websites, particularly those targeted primarily around a specialized vertical like recruiting.

Facebook registered 100 million in August 2008, despite being launched after LinkedIn and at that point, having only been open to the general public for about 8 months after years restricting users to verified .edu e-mails.

In April 2009, they hit 200 million, or about twice as quickly as LinkedIn registered their second 100 million.  Only 5 months later, Facebook reached 300 million users in September 2009.   Consider that this benchmark was hit well before the “mobile explosion” credited by LinkedIn for accelerating its recent growth in members.

Similarly, Twitter, founded in March 2006 as an exclusively mobile platform (hence the 140 character conforming to SMS standards.  The utility of such conventions as # and @ stem largely from the fact that these were available as on the default keyboard of almost all mobile phones at the time of its launch, which preceded the release of the first iPhone by a full year and the mobile revolution by several more.

With that genesis and the LinkedIn thesis that mobile is a significant driver of future growth within the social space – which is why they seem so openly optimistic about their future , than Twitter should swoop (pun unintended) into the lead and run away with the title.  

Consider that while up to 50% of LinkedIn’s traffic is mobile in markets as developed as the UK, according to its recent release, that pales in comparison to Twitter’s 80% mobile driven traffic as of February 2014. Twitter, however, logged their 300 millionth registered user way back in May 2011 and now has 883 million active users. LinkedIn also credits China with much of its growth potential, touting their growth in this market in which, famously, Twitter and Google are banned.

This is likely because LinkedIn, who’s been opaque at best, malicious at worst with issues on user and data privacy, has a similar mindset as the totalitarian state, and same approach to monitoring and limiting dissidents (think LinkedIn jail, random API restrictions, branding experience that’s fully employer controlled). There was plenty of fuss when, in their 2013 IPO filing, Twitter disclosed that as few as 46.2% of those accounts were actually active users who had registered but never actually tweeted.

LinkedIn, according to a company spokesman, “will not disclose their active user numbers,” making this comparison impossible, but instead pointing out that between the site and Slideshare, LinkedIn properties averaged 187 million unique visitors in Q4 2013 (corrected statistic; earlier versions reported this number as 147 million in error). 

That means that, assuming every LinkedIn visitor accounted for only one of these hits, than just over half of all users would have been active on these sites.  Facebook, on the other hand, averages around 84 page views/user a month, and Twitter around 19, according to Comscore.

CORRECTION: Joseph Roualdes, Senior Manager of Communications for LinkedIn Talent Solutions, reached out after this story was filed to point out (correctly), that overall, LinkedIn generates 41% of its traffic from mobile, that this number is not included in the Comscore figure of 187 million average unique visitors in Q4 2013, meaning that the previous claim of active user to unique visitor ratio is inaccurate or misleading. Recruiting Daily regrets the error.

LinkedIn, when mobile users are removed from the equation (and are, since app activity is not tracked nor aggregated in Alexa or Comscore numbers) still ranks less than one page view per registered user, whereas their competition enjoys a significant multiple when looking at registered users vs. traffic (which is a crappy benchmark, but the only one available). 

And while Twitter is abysmal at conversion at 1.17% of all traffic referred online, compared to Facebook’s 14% share. Both sites, however, absolutely wallop LinkedIn, who accounted for a measly .07% of traffic in Q4 2013. While LinkedIn users did have a slightly lower bounce rate at 29.9% to Twitter's 33%, and the average Twitter user generated only 5.6 daily page views per visitor, well less than the 7.8 pageviews logged daily by LinkedIn members.  It should be noted that Facebook wins this category, too, boasting a bounce rate of 21% and 15.63 daily page views per visitor, respectively.

Those statistics, of course, neglect mobile or app-based traffic, which, as mentioned earlier, LinkedIn lags far behind either of its competitors in terms of percentage of mobile visitors overall, and LinkedIn lags far behind these competitors in terms of mobile traffic.  This means that as LinkedIn, which will likely close the mobile gap in the coming months, will be increasingly reliant on mobile for continued growth, but might not be able to move into mobile quickly enough to satisfy shareholders.

These shareholders have already punished LinkedIn's share price, which has been adversely affected by estimates that, quantity metrics aside, the quality of their member - that is, their value to potential advertisers and clients - is pegged at substantially less than that of Facebook or Twitter.  With the average LinkedIn user valued at just $84, compared to $128 per Facebook user and $118 per Twitter user, these statistics should be of significant concern to LinkedIn's continued viability against competition increasingly moving into the talent solutions space (for example, Facebook recently rolled out the ability to target advertising by member's current company, job title & industry, among other professional filters).

As George Anders noted in Forbes, "Those valuations aren’t just a way of seeing how investors are playing favorites right now. They also provide a way of thinking about where social media stocks should trade, at a time when money keeps moving back and forth without any attention to traditional metrics such as price-earnings ratios."

In other words, LinkedIn might not be worth its nearly $22 billion in market value, after all - at the time of publication, LinkedIn's P/E is around 920 times profits to earnings at the time of this post's publication, a rate that more than doubles the normal valuation of most blue chip public companies - although this valuation may be coming back to reality, as evidenced by their stock price slide in Q1 2014.

Of course, this entire post might be specious because of the fact that LinkedIn, as we know, is a job board, and it’s unfair to compare it to a social network, or their growth rates to peers like Facebook or Twitter, even if they are identified as the competition in their SEC filings. Monster.com, of course, generated around 40 million unique views,according to Alexa, in Q4 2013, so that’s significantly lower than LinkedIn’s 148, and Monster is the #162 ranked site in the US, whereas LinkedIn is #8.  Indeed, the top job site, is #63.

2014-04-22_07-26-47But LinkedIn, built to drive engagement, has a bounce rate of 29.9%, which is only about 5% lower than Indeed’s 33% (identical to Twitter's, and the entire model of indeed is to create bounced traffic, from scraped description to online application.  That’s troubling, but not as much as the average visitor who actually went to these sites looked at only around 7.8 pages on LinkedIn,  compared to 6.7 on Indeed – again, a site built entirely around SEO, referral traffic and acting as an intermediary in the online recruiting process instead of a destination.  The average Indeed user spent only about half the time on site as the average LinkedIn user, but that’s still a margin that Mountain View can’t feel too great about.

Long story short, LinkedIn’s recent hoopla can’t hide the fact that their combined unique monthly visitors, which is the only available public benchmark (app and mobile activity, conversely, is proprietary) doesn't stack up to the lofty benchmark 300 million sign ups may seem. 400 million might be quick in coming, but chances are, they won’t come back after completing their registration, and if they do, they won’t stay long. 

Which makes sense, since the average LinkedIn user is too probably too busy looking for places which actually have open jobs posted to spend much time building a “professional network.” At least, that's what I'm guessing - but without the disclosure of active user figures, that's the best anyone can really do.

Read more at Recruiting Daily

Views: 368

Tags: Recruiting Tools / Sourcing

Comment by Nicholas Meyler on April 29, 2014 at 4:46pm

Sandra is obviously on the side of the 0.1% who don't like being contacted by recruiters.  Complaints are extremely rare.  More often, people are glowingly appreciative.  First of all, LinkedIn is a Job Board where people expect to be contacted by recruiters.  Secondly, if they don't want to be contacted, they can opt out and refuse to provide the option to contact them.  In 10,000+ inmails I have only had a tiny number of complaints, mostly from people who were unrecruitable job-hoppers who changed positions every year.  I think the whole 'recruiter spam' issue is garbage nonsense made up by sicko software engineers.  And, my friends, who are some of the best software engineers in the world, people I've known for 25 or 30 years, tell me that they definitely enjoy getting job-related email.... 

Comment by Derdiver on April 29, 2014 at 4:49pm
Ooh gets the popcorn and turns Dow the light in anticipation of upcoming comments!!
Comment by Nicholas Meyler on April 29, 2014 at 8:49pm

My last email blast to the software community had the highest open rate I've achieved in years: 35% opens.  Literally one in three.  Out of 29,000 emails I had 0 complaints.  Complaints are very easy to register, and there is a link to register a complaint (as well as an unsubscribe) which is easily visible on all my emails.  I have had not even one complaint in the last 130,000 emails.  So, who's getting 'pissed off'?

Comment by Sandra McCartt on April 30, 2014 at 1:10am
Who's getting pissed off? Aw gee whizzers Nicky. I guess the 2,234 people who submitted about 4000 of your emails to recruiterspam.com that earned you the title of the number 1 leading recruiter on recruiterspam.com. Congratulations, that's an honor all of us should aspire to achieve.
Comment by Derdiver on April 30, 2014 at 10:10am

"Nicholas Meyler has sent more email than 99.955% of the other recruiters on Recruiter Spam!" Sadly Meyler you don't get it since you are obviously a narcissist. You see how this only effect YOU. How do you know that when someone else sends a NON spam email they get grouped in to the lazy crap recruiters like yourself? I sincerely doubt not only your numbers but your ability to even understand what developers even do. Bravo on being the most talked about spammer on the internet!! 

Comment by Sandra McCartt on April 30, 2014 at 12:18pm
Dead, thanks, i was debating on whether to call a narcissist a narcissist or not. GitHub seems to have pegged it also. That being said, I don't have the experience or expertise as either a narcissist or a spammer to argue with one. In my opinion ,They are the only entity in their bubble so anyone who takes issue with their absurdity just must be crazy not to see their greatness.

When he sent the email for a 3-5 year coder in ROR to the guy who invented it two or three times and got busted on twitter. It never occurred to him to say," my bad, sorry, i should have screened my list". Oh no, the guy who busted him became a psycho for calling him out. Nothing like being a legend in one's own mind. For a real trip into the inner workings review his twitter feed. It's a case study in my opinion. Just my opinion Nicky, and my personal observation.

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