LinkedIn v. Facebook

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Great discussion by Nancy Miller @nancefinance of why the market loves LinkedIn and plainly does not love Facebook, despite the fact that it is trading at 102 times estimated earnings for 2013 versus 60x for Facebook.

3 comments:

1. There is a solidity in LI’s play for the hugely-lucrative recruitment market that leaves Facebook’s unresolved ad-based play looking fragile. Only 20% of LI’s revenues are from ads.

2. LinkedIn also does the unthinkable in this land of free/ads/privacy intrusions – it asks for subscriptions and plenty of people are happy to stump up $200 a year +.

3. While LinkedIn’s efforts to move into Facebook-type “social” seem to many of us half-baked, the issue also seems entirely secondary.

Lessons for Facebook? Well, to my mind one is clear: Why not try a subscription-based offering?

Why the Market Loves LinkedIn — and Hates Facebook.

Facebook Crashes. My 5 Questions.

English: Mark Zuckerberg, Facebook founder and...

(Photo credit: Wikipedia)

As Facebook settles to just over $20 and all kinds of problems emerge for the company as a result (chronicled here at length, including lock-up releases, tax issues, cash issues:�http://www.businessinsider.com/facebook-lockup-release-2012-8#ixzz22mj8cB6e) we keep coming back to the basics.

My 5 Questions, following up my earlier post Is #Facebook Doomed?

1. How do we value such an effort in terms that synch with Wall Street when all digital companies are fragile if wonderful things? (Answer: Dunno)

2. How do we project value into the future when (as I keep saying, over and over) interoperability looms in the social space, and with it the end of economic profit? (Answer: Modestly)

3. How can it be that our definitely “social” company shows less interest in social engagement (and diversity!) than almost any other on the planet, when it is probably the company most in need? (Answer: A Dreadful Mystery)

4. Why did Mark Zuckerberg and his buds, who claim serious social purposes for their enterprise (which I have no reason to doubt are genuinely held), not explore innovative financing and governance techniques instead of chanting IPO and setting up a governance structure that a C19th steel baron would admire? (Answer: A Curious Lack of Imagination?)

5. When will a major “social” effort decide to fund itself, in part at least, through subscriptions from its user base – with commensurate accountability – in place of the vortex of ads/analytics/privacy into which our premier social network is being sucked? (Answer: None too soon)

Facebook Crashes To End The Day – Business Insider.

A Walk Through Twitter’s Walled Garden

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Terrific post from Tonia Ries in which she puts Twitter on the rack. There’s not much in its current direction that any of us mere Twitter users is going to like . . . .

 

A Walk Through Twitter’s Walled Garden | The Realtime Report.

Social Media Value, Beyond the Campaign

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This brief piece from Ted Rubin offers a helpful corrective to the continuing marginalization of social. Why do so many execs find it so hard to think of the future, when they did MBAs that took them through NPVs and projected free cash flows and such efforts directed entirely to the value that the future will serve up?

OK, rhetorical question. But here’s a real one. Take your company. Multiply the amount of “social” by, say, 100. Then start to look at the implications. Scaling has the effect of changing the situation far beyond its scale. And that’s where we are headed.

 

 

Social Media Value = Thinking Beyond the Campaign | Smarter Commerce.

$1.3 Trillion from Social, Says McKinsey. BUT . . . .

English: McKinsey matrix as described in McKin...

English: McKinsey matrix as described in McKinsey Quarterly Español: Reproducción de la Matriz de McKinsey según se describe en McKinsey Quarterly (Photo credit: Wikipedia)

This looks a very interesting projection. The value is mainly to be found from better productivity that will come from better collaboration using social tools.

All this may be true. But the wild card lies in what I term strategic social – not incremental tools for biz collaboration (which are important) but the much messier and so far little engaged possibility of public social media tools such as Twitter and Facebook. In general companies have seen presence in these media to be useful for advertising and customer relations efforts, and delegated that presence way down then line. The prospect of values alignment between customers, employees, and the corporation; and the ready flow of information via relationships across the organizational boundary; have been little tapped and not that much noticed. My sense is that the value lying there is in fact much greater, as it can, should, may, drive innovation and culture change within the company. Culture change/innovation is where, prospectively, all the value lies – in the context of rapid change.

Evidence of very low levels of hands-on engagement with social in the C-Suite suggests this value is a long way from being realized.

McKinsey Says Social Media Could Add $1.3 Trillion to the Economy – NYTimes.com.

Mr. Zuckerberg comes to Washington

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So after Facebook boosts its DC representation, a new alliance is announced with Google, Amazon, and others to defend a “free internet” and such.

If this is not going to be seen as just another lobby ploy by rent-seeing corporates, they need to add non-profits to the group as full members, and spell out a very clear program with which others than digital corporate interests will be in agreement.

And while we are at it, they need to realize that their own corporate futures depend increasingly on their engagement with users/customers through social media. As we have kept noting –  and as Facebook’s almost unbelievable history of gaffes keeps demonstrating – the kings of social are among its least agile proficient, and strategic users.

Get these two issues resolved and both the future of the digital giants and that of America could look a lot better.

Facebook, Google, Amazon, EBay Form Internet Lobbying Group – AllFacebook.

Death and Tech: Our failure to manage driving and devices

We really, really aren’t good with risk. Who recently pointed out that more Americans were killed last year by furniture in their homes than terrorism? And it was in the august British Medical Journal, of all places, that I read recently that there is no clear evidence that wearing a cycling helmet saves lives. And so to the roads, and technology . . . .

The number of fatalities on America’s roads has begun to rise, and it’s plain that thousands of deaths and many thousands of injuries are attributable to one cause: the cellphone. The weak generic category “distracted driving” is entirely unhelpful. Of course eating fries and drinking iced tea, like turning on the radio, can distract. Nothing, nothing distracts like a device, whether used for texting, tweeting, or speaking; handheld, or handsfree.

The intrusive commingling of us and our machines has found its most difficult entry into our everyday lives at this simple point. And while we have also proved highly ineffective at regulating cellphone social conduct, no-one dies because of cell-yell in a Starbucks or atrocious manners at table (though people do die all the time crossing railroad tracks with phones glued to their ears; a tragic end, but essentially death by moron).

Meanwhile, thousands of bodies are being mangled on our roads. Think of a massacre of 100 men, women, and children; then another the next week; then another every week;  and you will get the idea. It is probably many more.

3 quick points:

1. We have failed as a community to address this issue, and for various reasons the checks and balances of the law have not solved our problem (multi-billion dollar settlements against providers, or manufacturers, along the lines of tobacco and asbestos would resolve the issue overnight; they may yet).

2. The evidence suggests that “handheld” bans that permit “handsfree” use – and are the legislation of choice at the moment – are a trick. Some studies suggest handsfree may actually be more dangerous, since we are less aware that our focus is in a conversation, not the car, than if we had to hold the item as a reminder. Certainly it seems to be no safer. It offers the specially dangerous thing, the illusion of safety, which in fact exacerbates the risk. People often have lengthy “legal” handsfree conversations for business and personal reasons and consider this normal daily activity.

3. One notable Australian study suggests that cellphone use while driving is exactly as dangerous as alcohol use; that is, that DUI is the same whether the influence is wine or a legal handsfree conversation. Yet we demonize “drunk drivers” with draconian penalties; handsfree chitchat is almost a required activity of moms in suburban minivans. (This is perhaps the single most ridiculous example of the illusions of “science-driven” policy, as I recently pointed out in discussion with a relevant expert at the NIH; he had read the Aussie document and had no defense to my argument.)

We all know what needs to be done. Cut the handsfree/handheld illusory distinction. Up the penalties. Or just make driving under the influence legal. Your choice.

No Evidence That Cell Phone Bans Are Effective, Report Shows – ABC News.

via Death and Tech: Our failure to manage driving and devices.

The C-Suite: Social-free Zone – but IBM’s report says things are cool

English: IBM's Watson computer, Yorktown Heigh...

IBM’s Watson (Photo credit: Wikipedia)

IBM‘s latest report on global CEOs – Leading Through Connections – makes fascinating reading and I commend it to you in extenso. It is packed with data and based on interviews with many hundreds of the top corporate (and some other) leaders.

But I have a problem. I just don’t find it very convincing. The answers are too good, too positive, too forward-looking. And on�the core issue of “leading through connections,” social, while the nostrums are as expected the evidence (as we know separately; see various earlier blogs here and much elsewhere) is that hardly any top CEOs (or CIOs! hard though that is to believe) are engaged with social at all. In fact, the evidence suggests that the Fortune 500 C-Suite is largely a social-free zone.�

My problem is that knowing this distracting fact undermines my confidence in the generally smooth prose of the report at large.

Read it, and read the social-usage evidence, and try to make sense of a situation that looks so good from the outside (or, should I say, from the inside; it’s the CEOs themselves who shaped the data in this document).

Korea’s High-Speed Internet Access Passes 100% Penetration

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South Korea has been promising that by the end of 2012 it will have every household with an average speed 100x that of the US household.

I discussed this and the important historical context (in 1960 S. Korea had a lower GDP than the Democratic Republic of Congo) in an essay on Washington’s Innovation problem, which you can see here:

On the Innovation of DC: Washington’s Witching Word in Century 21

 

 

Korea’s High-Speed Internet Access Passes 100% Penetration.

Most Organizations Still Fear Social Media

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From Gartner via HBR comes another handy report on how major organizations are responding to social media. Despite the alliterative categories (sorry, not into that) there’s great data and analysis here, although it is focused on the tactical and not so much the strategic value of social.

The “fear” term is interesting. Seems to me that fear requires a level of (perhaps mis)understanding that the failure of the CEO/CIO class to engage personally with this new world is somewhat OTT.

My recipe stays the same. A serious immersion in social for every member of the C-Suite and the board. Best time/money spend any major organization could make; and let’s start tomorrow.

The grim details: 14/500 CEOs tweeting . . . .

The Grim Details on CEOs and Social; 14/500 are tweeting, for example

Most Organizations Still Fear Social Media – Anthony J. Bradley and Mark P. McDonald – Harvard Business Review.