In today's CityAM, tucked on Page 2 is a piece about the business networking site Linkedin planning to raise finance via an IPO valuing it at $3bn on sales of $161m and profits of $1.8m.
That in my head means that they are values at 1500 times profit and about $33 a member!
How does it attract that value on such low sales numbers and where are the future profits going to come from to make the valuation stick! Looking the Sales split and you find that
- 41% from hiring solutions -so about $40m
- 32% from marketing solutions
- 27% from premium subscribers
The Recruitment industry must learn from what has happened with their relations with Job boards and each business must have its own Strategy on how it works with LI, and not fall into being dependant on it at the consultant level whilst the board think it is just like the old days! There are new risks to consider and below is a sample of things any Owner or Director should consider :-
- Do you know how much time is spent each day on LinkedIn in your business? (you should know by now?)
- How much do you pay currently for the LinkedIn directly or indirectly? (might be via expenses for the upgraded package or RPS)
- Where do you Headhunt candidates come from? (how good is you source tracking?)
- Where do you clients look when you cold call (What is your profile look like? and that of you business?)
- What other Social Media sites do you use?
How will LI make more revenue? Here are some ideas? Are you ready for them? Do you like them?
- Allow for Profile downloads at a cost per Profile? at £10 per download
- Allow for a better personal profile at £3 per month?
- Allow for the price per Job posted to rise and be £200 an ad delivered personally to a target list done by them
- Allow for them charging per introduction! but don't know how they could do this yet!
How else do you think LI can make money from the Recruitment Sector and are you willing to pay?
