Essentially, there is an evolution to more specific Business Social Networks versus more general Networks like LinkedIn. This is beginning to allow for more specialized content and information for a vertical network, and since LinkedIn doesn't have a good platform but does have an extensive resume database, it is vulnerable on the mid to long term basis. Essentially it still has time to react, but competition will be building.
Mentioned verticals are Academic and Investor based.
Hope that you find this interesting, as we watch the emergence of this fascinating segment of the marketing methodology. Enjoy the read!
The Verticalization Of Professional Networks Begins: Is It A Threat To LinkedIn?
This note is from BI Research, a new tech-industry intelligence service. The service is currently in beta and free.
 LinkedIn hiring solutions revenue Image: Business Insider Research
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- Academic networks. These networks help researchers and scientists get together to share data and information, and help companies tap networks of researchers to solve problems. One such network, Kaggle, recently added Silicon Valley and technology heavyweight Max Levchin as chairman. Another example is Paris-based Hypios.
- Investor networks. These networks help investors conduct private financial transactions like M&A and asset sales. An example of a contender here is CapLinked, but also investors that connect entrepreneurs and investors like AngelList.
As we argued in our study of network effects, generalist networks can be undermined by more focused vertical upstarts. Is this going to happen to LinkedIn?
In the short-to-medium term: no. From a market opportunity standpoint, LinkedIn is a giant resume database, which gives it a unique asset to attack the multibillion dollar global recruiting industry, which it is already doing as the chart above shows. That is an enormous opportunity, and whether these networks succeed or fail won't make a difference to LinkedIn's execution in this market.
That being said, it is a big missed opportunity, because it shows that LinkedIn can't become a platform. Facebook's greatest insight, and what guarantees its dominance of the web over the next 5 years, was its crucial early realization that it couldn't do everything "social"--but that it could provide tools to third parties to do it through their social graph, thereby improving the value of their company (and allowing them to take a tax later on).
Building platforms seems to be a "DNA thing." It's a core competency, and companies either can or can't do it. And LinkedIn, so far, has been in the latter category. It has certainly tried to become a platform by allowing third-parties to build apps on top of LinkedIn and providing tools like an equivalent of Facebook's Connect feature, which allows user to log in to third-party sites with their Facebook credentials. But so far the applications are very limited. And several third-party LinkedIn developers have told us, on condition of anonymity because they are partners with LinkedIn, that LinkedIn's third-party tools are limited and technically frustrating.
LinkedIn is often referred to as a "professional" or "grown-up" Facebook, but that misses a crucial difference. Like Facebook, LinkedIn is a social network; unlike Facebook, LinkedIn is not a platform. This is a missed opportunity, and even though it shouldn't affect LinkedIn in the short-to-medium term, it remains a long-term weakness because in the future vertical professional networks just might undermine LinkedIn.
Therefore, even though LinkedIn has a big opportunity ahead of it that it is uniquely positioned to grasp, its incapacity to turn itself into a platform puts a lid on its potential future value.
Link to the original article:
http://www.businessinsider.com/the-verticalization-of-professional-networks-begins-is-it-a-threat-to-linkedin-2011-11
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