The real value of LinkedIn

Microsoft has just made one of the boldest moves in its history by spending more than $26 billion on LinkedIn. The acquisition means Microsoft can embed LinkedIn with Skype, its email system and other Microsoft enterprise products so that, in the words of one Silicon Valley expert, it will be able “to recreate the connective tissue for enterprises”.

But I think Microsoft has bought something far more precious than what some commentators patronisingly call a social network for people looking for a job. LinkedIn is a content company. Microsoft has bought one of the world’s most influential, specialised, highly read, constantly updated digital media companies around. And, unlike some, I don’t think it has wasted its money.

I like it for the content. In one morning I read a fascinating statistical analysis by one of Britain’s top economists, Mark Gregory, of why the top tier of British soccer is destined for a prolonged period of upsets as the also-rans catch up on the powerful clique that used to win everything. I learned from one of the most senior executives at pharmaceutical giant GSK, Eric Dube, how corporate leaders can transform their skills between America, Japan and the UK. And I was sent a piece from Henry Blodget, the CEO of Business Insider, about why the slump in wages means it’s time for a “better capitalism”.

Yes, I was also told that Lucinda has a new job, somebody I once met “likes” a goofy video and also that a mysterious, unnamed figure from the market research industry has been looking at my profile. But those bits are fluff. The real value of the site is two-fold.

First, as a publishing platform in which executives can expand their networks, their influence and their opportunities for a better-paid job by providing original content. And second, as a relationship management tool, the content of which Microsoft will be able to use for cross-marketing purposes.

Some don’t get it. A journalist on the Daily Telegraph opined that while LinkedIn is a “fact of life” it’s also the “dull cousin” of Facebook, “tolerated rather than loved and forgotten once we leave the office”. His assessment is woefully inaccurate. Like all the best digital media companies, LinkedIn has pivoted smartly to ensure that its original raison d’etre – a job-seeking social networking site – has morphed into something far more powerful.

After pornography, gambling and shopping, content is the most valuable service internet companies provide. What LinkedIn does is produce content that people actually want to read and, who knows, may actually want to pay for.

You can read a longer version of this post on Forbes’ blog.