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: 480

Comment by Keith Halperin on April 24, 2014 at 11:41am

@ Kelly: (LI) Agreed. (Sell hack) Did you do the "pay to go to the front of the line" thing? I didn't...


Comment by Kelly Blokdijk on April 24, 2014 at 7:34pm

@ Derd -  completely agree #s don't add up. 

@ Keith -- nope didn't even know there was a paid (SH) thing. Never paid for any LI either. 

Comment by Nicholas Meyler on April 25, 2014 at 3:02am

Was somebody being intelligent again?  Shame on you!  You will burn in Heck for your arrogance and pride.  Using numbers and facts to justify arguments is clearly highly unethical and illegal.  Let's say, for example, that the number "300 million" actually exists, somewhere in Einstein's space-time continuum:  if so, then how much is it actually?  Has anyone counted it?  Makes you think, doesn't it?

LinkedIn has been scalping me for years and has no conscience.  Other sites let me keep portions of my scalp attached, but LinkedIn doesn't.  I wish they wouldn't brag about it and call me 'baldy'... it's almost too much to bear.

Is there a Cliff's Notes version of your research?  I think I need it.  Please don't tell LinkedIn that I said anything critical about them, since I think they charge extra for that.

My "Remains of the Day" lunchbox notwithstanding, I don't consider myself an intellectual on-par with 4th graders, so I do somewhat resent the haughtiness of your tone.

Comment by Nicholas Meyler on April 25, 2014 at 3:05am

Seriously, though, Matt, could you please condense the meaning of your literary excursion into higher mathematics into just one sentence for those of us who aren't familiar with numbers?

Comment by Matt Charney on April 25, 2014 at 10:01am

@Nicholas: The math here is that 300 million registered users is one number that really doesn't have a meaning. And anything involving analytics is the opposite of a literary excursion - as a recruiter I don't like quant stuff anymore than you likely do.

Comment by Keith Halperin on April 25, 2014 at 12:42pm

@ Kelly: This was a message that was something like: "We're catching up on the big backlog, and if you want to move to the front of the line, you can pay" or something like that.

Comment by Nicholas Meyler on April 25, 2014 at 4:31pm

@Matt:  It's a good article and the numeric analysis is quite helpful.  My chief gripe with LinkedIn is that they overcharge and under-provide.  I used to be allowed to send about 150 inmails to potential candidates per day, and now they are limiting that to about 150 per month.  The problem is, even with all the information about candidates that LinkedIn provides, I still need to make many more contacts than they allow to find the best people.  They aren't cutting it, as a service, any longer.  It's true, most of the people on LinkedIn aren't looking, so it necessitates more effort at making contacts.... That's one of the main reasons that I used email lists, too.  LinkedIn is far too limiting, despite its over-reaching claims.

Comment by Nicholas Meyler on April 25, 2014 at 4:34pm

Back in the day when it was free to email any group member, I had 4 profiles, each with a membership in the maximum number of groups... that was a great research tool.  They shut me down eventually, because they weren't making enough money off me.  I've even had a salesperson from LinkedIn tell me "You need to buy the highest-end product we sell, because we'll always find ways to ratchet down the value, and spending the most money is the only way to be safe."  -- She was lying.

Comment by Sandra McCartt on April 29, 2014 at 2:48am
Can you imagine what it would be like to potentially piss off 150 people a day with recruiter spam?
Comment by Keith Halperin on April 29, 2014 at 12:58pm

@ Sandra: I'd love the opportunity to try! Oh, for those golden days of yesteryear....




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