Just in: Linkedin posts its most profitable quarter
Monday, March 23, 2009 at 4:59PM 
As viewed on Techcrunch, Linkedin founder Reidd Hoffman (pictured left with a 5$ haircut) defines his company to be no less than a disruptive low cost provider of hiring services, with Q4 being their most profitable quarter, ever. Let there be no doubt: Linkedin does well in a recession. Yeeha ! In Mr. Hoffman's own words, I quote:
Yes, Q4 last quarter. And we — our primary revenue streams, we have three of them. One of them is subscriptions on the site. You can take out your credit card, you get better search functionality, a better way of contacting people directly in order — and we figure that’s useful when you’re trying to accelerate your business practice, you’re using LinkedIn as a serious business professional.
Oh, by the way, disrupt "this": one great article describes how to bypass the "enhanced search functionality for a fee" offered by Linkedin-Reidd Hoffman; a bypass called "x-raying", using the syntax of Google's search engine.
The enigmatic Mr. Hoffman goes on:
We have a software service business, primarily driven by recruiting. And as a surprise, we’re actually doing quite well at that currently. You would think that with layoffs and everything else that that business was being hit.
Currently we’re the low-cost provider of really good hiring services. When you’re hiring 50 people as opposed to 1,000 people, we’re still growing there. So that’s useful. And then advertising, comparable to the “Wall Street Journal” demographic.
Executive search will not be as impacted as is recruiting and staffing, because it relies on extensive amounts of tacit knowledge, highly customizable service delivery, and a significant amount of autonomy for consultants (which is why we like the job so much). As Hoffman claims, Linkedin can be rightly regarded as disruptive, just as Dell during the .com boom. Today, Dell (relatively speaking though) still flourishes, but its business model has become common place. HP and Acer have grown significantly at the expense of Dell the last 3 years, and its initial disruptiveness has been diluted due to the high diversification and proliferation of distribution channels. Anyone predicting the death of retail went bust a long time ago.
There is no doubt that Linkedin is changing the rules of the recruiting game. The recuiters black book, or the proprietary database, is becoming fast a commodity. The landscape of unique competitive differentiators in the sector is changing fast - and anyone, including the executive search firms, would do well to catch up and integrate web 2.0 technologies into their DNA. The writing is on the wall, whereas search revenue everywhere falls during the recession, Reidd Hoffman is laughing all the way to his new hairdresser bank.
