The headline I heard this morning on NPR (read full story from CNNmoney.com, click here) did not surprise me – Microsoft Buys Yammer – but at the same time, I’m disappointed in LinkedIn. Perhaps LinkedIn did not have the cash (although it could have been an all stock deal) or they did not see a strong business model in Yammer or they could have been strategically asleep (perhaps) – regardless, LinkedIn missed the boat on this opportunity.
Yes, LinkedIn is the best B-to-B social network going (I’m a big user) but at the same time, LinkedIn should not be so myopic (click here) and just define itself as a massive, digital, and interactive Rolodex.
In my eyes, LinkedIn should position itself towards digital services that are B-to-B. Yammer would have been a nice fit. WebEx would be an excellent premium service to LinkedIn users. Even live chat to have a team meeting among multiple members would be a nice service to offer its users. What about Ning? Microsoft bought Skype a while back for $8.5 billion and I was thinking these same myopic thoughts about LinkedIn. However, at the time LinkedIn was not a public company and $8.5 billion is a ridiculous amount of cash to spend on a firm that did not have a strong positive net cash flow.
The lesson is: if a firm defines itself to narrowly (e.g., myopically), the firm could find its business out of flavor in the near future. Monster.com and CareerBuilder.com are both struggling at the moment because the business that they defined for themselves 5 to 8 years ago isn’t viable to today’s marketplace because of LinkedIn. I just hope that LinkedIn does not find itself in the same predicament 5 or 8 years from now.
Something to thing about today…
Associate Professor of Marketing
Stillman School of Business
Seton Hall University