You’ve probably heard about it by now, either from Patrick’s post yesterday or from somewhere else. If you’re still catching up, here’s the latest out of the social buzz sector: according to Forbes, Facebook could launch a new “Jobs” product as early as next month.
Forbes’ article title, “Facebook Jobs Could Kill LinkedIn’s Momentum,” positions Facebook as if it’s destined to take a big bite out of LinkedIn’s market share in the job hunting market. While that could potentially happen, there’s no guarantee that Facebook Jobs will be the “killer app” it’s being hyped up to be—not to mention, the two services are totally different, both on the front-end and behind the scenes.
So, just how realistic is it to expect Facebook Jobs to actually take a bite out of LinkedIn’s product? Let’s take a look at what makes Facebook and LinkedIn tick, and what challenges Facebook has to overcome for Facebook Jobs to hold any traction.
Letting 900 Million Sleeping Dogs Lie: Facebook’s Aversion to Change
As Patrick pointed out yesterday, Facebook currently touts over 900 million users—if you had that many avid customers, you should be sitting on a gold mine, right? Facebook’s biggest hurdle since before their IPO in May has been exactly that: the potential to make money is right in front of them, but they’re still having trouble converting on it. Facebook has had ample time to come up with some sort of solid monetization strategy, but their hesitance to try dramatically new things makes it look like they’re afraid of chasing their 900 million customers away.
Facebook users are a surprisingly stodgy bunch. Most users like everything how it is, and we can all relate to the frustration and annoyances that come with a user interface update on your Facebook Timeline. Not only do options and menu items tend to jump around the page every six or eight months, but as soon as Facebook institutes a change, countless friends post “I want the old Facebook!” status updates. You can imagine what kind of chaos will ensue if Facebook implements some of the changes they seem to be planning with Jobs.
Are You Willing to Blend Personal Life and Professional Life?
I imagine that Facebook is frustrated with this tendency for backlash against any and every little tweak, so you’ve got to believe that they’re anxious to see how Facebook Jobs might be received. On the internet, your users ultimately determine the purpose of your product, and they can steer it in directions you hadn’t planned. It’s easy to see what users think about Facebook and LinkedIn: one is for personal life; the other is for professional life.
That’s exactly why I wonder just how well Facebook Jobs will catch on. Will users actually appreciate a new job-hunting portal on a site they use primarily for their personal life? Would you want potential employers judging you by your carefully prepared LinkedIn profile, or your Facebook information? For many users, Facebook Jobs may make users “clam up” and tighten their privacy settings even more, causing them to become even less sociable on the biggest socially-driven website on the planet.
Facebook cashes in on opportunities for sharing, not on providing free web space to 900 million people. Encouraging social interaction should be at the top of Facebook’s list of concerns going into this new product.
Facebook’s Monetization Problems Will Be LinkedIn’s Gains
According to Forbes, Facebook won’t monetize Facebook Jobs at the beginning, and will instead allow users to roam free across the site to collect usage and engagement data. This already puts them years behind LinkedIn’s advanced job listing product line, and it’s painfully obvious in their financial outlooks.
Take a look at the Trefis valuations for LinkedIn and Facebook, and you can see where Facebook’s strengths and weaknesses are. LinkedIn’s revenue streams are healthy, and over 50% of their primary revenue stream comes from subscription-based job listing and Premium account services—direct products that corporate and individual users expect to pay for.
Facebook’s finances, by comparison, are upside-down. Almost 70% of their revenue comes from ad delivery, and it’s well-known throughout the advertising industry that ad revenues are falling dramatically. (Take a look at how badly print ad revenues are tanking for an idea of what Facebook has to look forward to in the all-too-near future.) Transactions on Facebook products and third-party transactions delivered through Facebook make up a little over 21% of Facebook’s total revenues.
LinkedIn Outperforms Facebook in Per-User Revenues, Too
LinkedIn’s ad revenues alone (28.5% of total) are more robust than the entirety of Facebook’s own product revenues. That’s not even the most surprising insight into Facebook’s monetization problem, though.
Facebook’s hesitance—or total inability—to monetize their product is allowing LinkedIn to steal their lunch money and then some when it comes to per-user revenues. From Business Insider:
- LinkedIn users spend on average 18 minutes on the site each month. Facebook users spend 6.4 hours each month on-site.
- LinkedIn makes $1.30 in revenues for every hour a user spends on the site. Facebook earns a measly 6.2 cents per user per hour.
- LinkedIn offers special account services for talent scouts and recruiters that can cost up to $8,200 a year per single user license. Adobe Software has 70 seats, meaning LinkedIn is making roughly $500,000 in pure revenues yearly from a single client.
- Thanks to their highly sought-after product, LinkedIn only has to spend 33% of their revenues on actual sales or marketing.
LinkedIn has a platform with many different distinct service tiers and purchase options. Facebook, on the other hand, has a platform without distinct services, through which products provide tertiary purchases. Many of the announced features Facebook Jobs is said to have are already something LinkedIn is doing, or has done in the past. A hard-to-monetize platform without any real, substantially competitive features doesn’t seem like much of a threat to LinkedIn.
It’s said that in today’s tech market, you have to turn a product into a platform for it to succeed. The biggest names have followed this strategy: Apple, Amazon, Twitter, even LinkedIn. But Facebook is the platform, but it isn’t exactly the most amazing portrait of success, especially not compared to LinkedIn. So when I see Facebook move towards a fresh product that’s supposed to directly compete with LinkedIn, but doesn’t do anything more effectively or efficiently than LinkedIn, I have to wonder: is this dog more bark than bite?