This morning, I jokingly
congratulated my colleague Ron with his new job at ‘Looking for a new challenge...’
Inc. I had been warned by LinkedIn ($LNKD), through my mail box, that Ron had found this new, but not so promising ‘job’.
After reading this LinkedIn
mail, I couldn’t help wondering about exactly who was made happy with such a pointless
and annoying message?! And, as a matter
of fact, with the whole flood of often pointless congratulation mails and other
insignificant and annoying warnings that are clotting into my mailbox every day?!
Sent by the likes
of LinkedIn and Twitter ($TWTR).
I do actually appreciate
the warning messages by LinkedIn, that connections of mine are celebrating
their birthdays. Birthdays are easily forgotten and congratulating people with
it – through a personal mail, of course – is a good way to restore or secure relations
with people who you truly like.
Still, I would like
to short the messages that “John Doe has added a new skill”, or that “Pork E.
Pig, Wile E. Coyote and Elmer J. Fudd have retweeted this tweet by Daf E. Duck”.
Perhaps the worst
category of annoying messages is, when you reacted to a certain message or
picture ‘in a random act of foolishness’, and afterwards you get a warning for
every time that somebody else reacted to the same message or picture.
As if I care, if it
wasn’t my picture, message or riddle…?!
If John Doe enjoyed
a busy week, having a few courses and workshops which he all added to LinkedIn,
I might receive two or three different emails on ‘his’ behalf.
And with something
like the crisis in Ukraine or other important events happening in the world, I
might receive daily emails from Twitter, in the spirit of the one I mentioned earlier, warning me about Tweets from Tweeters that I follow.
Last, but not
least: if I have been so blonde to solve one of those ubiquitous math riddles
on LinkedIn and to post the answer, I can expect at least ten other responses
from people who were also ‘legally blonde’ by solving this riddle. I just don’t
want to know that! Really!
I suspect that
there is a very simple reason for these useless and annoying mails and messages:
the enormous amount of money that companies like Twitter and LinkedIn received
from their IPO’s at the international stock exchanges. Money that should visibly do something...
Both LinkedIn and
Twitter suffer from the following circumstances: their product is already nearly
perfect and loved by many people, who adopted it worldwide. This worldwide
adoption has created an enormous amount of ‘potential value’ for these
companies; hence: like potential energy in physics.
However, the real
value of these companies (aka the profitability) lags dramatically, due to a missing,
structural earnings model that could fund these companies in years to come.
To make things
worse: many of these adopters often love the product ‘as is’ and they don’t need to
have many extras and new features to come with it. Besides that, they don’t like to see
their favorite tool flooded with adverts and sponsored links.
And so there is actually
little room for dramatic improvement within the core product, unless these
companies expand their core business with radical new ideas, products and
services. This was a message that Microsoft, Google and Yahoo understood very
well in the past.
Still, both Twitter
and LinkedIn manage an enormous amount of investment money coming from their
IPO. That money is now looking for a way to be spent productively in order to offer
new products and services and to generate extra (sources of) income. Until now that has
seemingly happened in vain; that is why I call this money ‘cash-without-a-purpose’.
Spending this investment
money productively and effectively is a very hard and unrewarding task, as
there are thousands of ways to do things wrong and only a few ways to do things
right…
And all the time
the millions and millions of shareholders are breathing in the necks of the CEO’s, in order to
see improved results and a promise of endlessly increasing cash flows in the
future. That was the reason for the shareholders to invest in Twitter and
LinkedIn in the first place. This pressure seems immense…
I adore Twitter and
I am amazed by the enormous amount of good and topical information, usable links
and interesting discussions that I can find there every single day. Still, I
don’t see how Twitter – as a single product - could be improved further…
Or how – as a
matter of fact – it could ever earn its enormous amount of investment money
back, coming from its initially very successful IPO.
When I look at the
stock ratings since January, 2014, I fear that the shareholders have developed the
same haunting thoughts:
 |
| Stock rate development of Twitter during the last year Data courtesy of: Bloomberg.com Click to enlarge |
About the same is true
for LinkedIn. It is a good and effective way of putting your curriculum under
the attention of companies and it can bring you in contact with people and
companies that offer jobs, which are suited for you.
Still, I consider LinkedIn
to be quite boring and – in my humble opinion – it can never beat personal
contacts and personal relations. With LinkedIn you can turn people you already know
in (slightly) better relations, but you hardly turn people you DON’T know into valued and satisfactory, personal
relations after all. The bottom line is
that people remain ‘suckers’ for personal contacts and friendship, even if these are on a strictly business level: you simply don’t
care so much about people who you don’t know personally.
Thus, ‘friends’ and relations on LinkedIn became exchangeable ‘commodities’, which could be used and appreciated for their (temporary) purpose and usefulness. However, they could never replace real colleagues and friends of flesh and blood!
Its IPO and the first three years of its existence, after the introduction at the stock exchanges, have been hugely successful for LinkedIn.
Nevertheless, the stock seems ‘over the hill’ since September 2013 and I wonder if this is ever going to change.
 |
| Stock rate development of LinkedIn during the last 3 years Data courtesy of: Bloomberg.com Click to enlarge |
Will this be
because the people became disappointed with the general direction, improvement and expansion of
LinkedIn?! This could very well be. And unless something dramatic happens, this
might not change so easily.
My prediction for
the future would be that Twitter and LinkedIn will continue their life as
useful and handy tools, but quite limited in their purpose.
They will both be
appreciated by their users for what they are do for them, but they might never make
their shareholders rich in the long run.
Unless… their
management can make a dramatic U-turn, of course.
Thank you so much for sharing a lot of this good blog thank you for sharing Admin...
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