Pace Lattin: LinkedIn’s 100M members number isn’t really…real.
LinkedIn, a great networking tool for professionals announced that it hit its 100M member level, signifying according to some analysts how amazing the site is and how what a great IPO this will be. I’m not doubting LinkedIn is a great site, as I use it and highly recommend it as an amazing business tool, but I would like to point out how deceptive this number really is. As many people have pointed out, Linkedin is at 100M members, 1/5th the size of Facebook – hoping to make potential investors during the IPO believe that it is going to grow enormously in size and become a major player in the social networking stage. While I wouldn’t say their 100M member level is complete BS, it does smell and is based on some really silly numbers.
Again, I’d like to make it clear, I really like LinkedIn. No complaints there and they definitely deserve a great IPO and are a great company. However, whenever I read any numbers about sites “membership” base, it really irks me because those numbers are almost always highly inflated and based on things that don’t really matter. Yes, it is likely that there are 100M user accounts on LinkedIn – I don’t doubt that. However, those numbers really don’t matter for a variety of reasons.
The first reason is simple: many accounts on Linkedin are either fake (people trying to spam, get people’s info, solicit business under different names) or more importantly, inactive. However, since they are about to do an IPO they want to make it seem like the site is insanely large, with a huge percentage of the US population, specifically, with LinkedIn accounts. However, the actual people who visit and use linkedin is actually much, much smaller.
According to Compete, the last month they calculated the unique visitor count of LinkedIn, it was actually around 15M users, something significantly smaller. Compete only counts US Visitors it turns out, and according to LinkedIn, approximately 45M of their members are from the US. So we are looking at a drastic number difference between “accounts” and actual users. Of the 45M US accounts, only 15M approximately are active on a monthly basis. Internationally, I have no idea how many are real, but I’d gather there is a huge amount of fake accounts from phishers from China, Nigeria, India and other countries that these rings operate from.
However, this is not what really makes me wonder. What really gets my interest is that since last year, LinkedIN has had almost no growth in actual visits, according to Compete. With the up and downs, its basically been the same since last year, with some growth, losses but somewhere in the same range statistically.
That is what is extremely misleading about their press releases and the media’s reporting. They consistently say that their membership base has grown, because all members, regardless if they actually use the site are additional members. Since the majority of the members don’t pay, and even if you stop paying you are still a “member” there is no way for the growth to get smaller in “membership.” It would be like a store counting every person who ever entered the store as a “customer” and give reports that their customer base is growing over time.
Members should not be just people who signed up for a product, but instead those who are actively involved in the website on a regular basis. Remember, for LinkedIn, their revenue is almost completely driven by the few people (me being one of them at one time) who pay to have a special membership that allows more features. Those should qualify as “members”, the rest of the people who use the site as “visitors” and the millions of other people as “dead accounts.”
Why is this a potential problem? LinkedIn is doing an IPO and anything they say is regulated. In theory if the numbers they are giving are misleading, there are potential problems down the line, especially if their investors decide to sue them. I highly recommend that LinkedIn clarify what their 100M membership.
4 Responses to “Pace Lattin: LinkedIn’s 100M members number isn’t really…real.”
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I think it’s over-inflated..probably more like 50 million. That 15 million uniques is probably the people that use it monthly…
I take a different view. I think in the long run Linkedin will be just as valuable or more so then Facebook. I believe this based on the shear fact that people care about their income more then their social lives. Its also more expensive to make a business owner enrol in a business service then it is to get a consumer to buy something. That will serve Linkedin well with their target.
Linked in is replacing most career sites like Monster and the Ladders. And it should. Publicly, you can see who knows who and who is recommending who.
The first thing I do before making a hiring decision is check a candidates linkedin account. if they don’t have one they usually go to the bottom of the list. If they do, i find that how they maintain their linkin account will be a good indication on how serious they are about their career.
Their numbers a lower then facbook for sure, albeit the work that goes into developing a linkedin account for a professional, i believe, is more valuable to that professional then the work that goes into being social.
Add into that Linkein’s various upgrades that lock it’s customers into continuity billing and I think your going find linkedin one of the best buys should it go IPO. Not for a quick buy and flip, but a buy and hold.
Faebook, while an amazingly successful phenomenon, will have countless competitors nipping at their heals for the life of their business. I believe that were going to find people committed to the work they accomplish on linkedin and and have a higher sticky ratio. This is going to be a company that will show steady growth with high barriers of entry and long bright future.
Do you research and verify your information before blogging?
“Remember, for LinkedIn, their revenue is almost completely driven by the few people (me being one of them at one time) who pay to have a special membership that allows more features.”
WRONG. A simple look at the prospectus confirms what’s already widely known. In the three months ending September 30, 2010: $28 million in recruiting/”hiring solutions” (45%), $18 million in “marketing solutions”/advertising (29%), and $15 million in premium subs (24%)
Read more: http://www.businessinsider.com/linkedin-s1#ixzz1ImFMnggA
Damn, you’re right!