SHOULD FACEBOOK ACQUIRE, COOPERATE, OR JUST STAY FIERCE RIVALS WITH LINKEDIN?
Headquartered in Menlo Park, California, Facebook is by far the largest online social-networking company in the world. Headquartered in Mountain View, California, LinkedIn is the largest online professional network de-signed to help members find jobs, connect with other professionals, and locate business opportunities. The two companies are becoming more and more rivals as their business model becomes more and more similar.
Both websites are free for members to join and both earn money through advertising spots. LinkedIn also earns revenue through its job-listing service. Companies post job openings on LinkedIn and search for candidates on LinkedIn—particularly advantageous for students nearing graduation. Facebook wants some of this action. Members of LinkedIn tend to be white collar and highly educated; 45 percent of LinkedIn visitors earn more than $75,000 per year. Facebook has nearly 3 billion members across the whole economic spectrum of income.
As evidence of the two firms gravitating toward each other in products and services, LinkedIn recently rolled out its video uploading feature, trying to become more like Facebook. Facebook is testing new professional (rather than social) features trying to take market share from LinkedIn. Both companies’ primary strategy is product development. Both Facebook and LinkedIn continually develop new and improved, visible and invisible, business analytics models to gather and assimilate data, and then sell the data.
LinkedIn has developed a big-data framework dubbed Gobblin that helps the social network collect tons of data from a variety of sources so that it can be analyzed in its Hadoop-based data warehouses. The company also houses a variety of internal data (information pertaining to member profiles, user actions such as comments and clicking, and so on) in databases such as Espresso and event-logging systems such as Kafka. Also, LinkedIn takes in data from outside sources—for instance, Salesforce and Twitter.
Facebook is testing a mentorship feature to help Facebook members identify and spend time with professionals based on common interests. Facebook is also testing a LinkedIn-like resume feature. Many people prefer to keep their social activities (Facebook) separate from their professional activities (LinkedIn), but as these two firms become more and more similar, separation becomes cloudier.
You are the CEO of Facebook and have been given a task of merging these two companies together. But after careful thought, you told the Board of Directors not to go ahead with the merger. You believe that Facebook can develop features to allow people to efficiently hunt for jobs on their website, including posting their professional vita. You also believe Facebook can develop features to allow businesses to hunt for employees on their website, including posting job descriptions and job vacancies.