LinkedIn's Plan for Domination

Last May, Facebook announced that they were launching their platform for any developer to build applications on top of the Facebook social network. The opportunity was too big to give up and almost immediately, Facebook had an onslaught of 60,000 developers all trying to get a piece of the action. A few developers became overnight millionaires leaving others to continue their search for gold.

Almost a year later, many developers still haven’t found their gold and Facebook is still left trying to figure out how they are going to begin making serious cash flow that justifies their $15 billion valuation. It appears that LinkedIn may have taken advantage of the shadow cast by Facebook as the press and blogosphere buzzed about everything Facebook (myself included).

I at one point went so far as to suggest that LinkedIn would soon see its end as Facebook took up its role as the social network of choice for professionals. Boy was I wrong! As I wrote last week, LinkedIn’s growth has surpassed Facebook. Not only did their growth surpass Facebook but according to Alley Insider, LinkedIn is also earning CPMs as high as $75.

Whether or not the numbers are true, LinkedIn has figured out a way to capitalize on their highly valuable user base. I would suggest that they are about to further this with the launch of their application platform. A few months back they announced a few launch partners including Salesforce.com, but stated that even at its full capacity, platform developers would be limited as well as applications.

Get ready to see applications that provided extended utility with mobile phone integration, applications that promote high end goods and services (AMEX, Ritz Carlton, etc) and apps that help your overall experience on LinkedIn a better one. While they will never be as large as Facebook or Myspace, they have no need to be. They can always point at Facebook and Myspace and argue that those two platforms are for games whereas LinkedIn is for business.

There’s no way around this and businesses are also taking note. Different platforms work for different demographics and while Facebook would like to have the largest mapping of the social graph, the reality is that business connections are still taking place on LinkedIn. As long as LinkedIn can keep their platform strictly for business and can maintain their select demographic profile, they will continue to produce more value per user on the site.