The most successful social network for business people, LinkedIn was much in the news recently following $53 million in new funding. What no reports said, including The New York Times, is how LinkedIn has betrayed the trust of its members.
At HR conference after HR conference, when the Web 2.0 session turns to the hot topic of social networks, two or three hands go up for using Facebook or MySpace and more than half the room responds to using LinkedIn.
It reminds me of Plaxo.
Remember Plaxo? You probably don't get e-mail requests from them anymore, but I used to get dozens on behalf of people I knew asking me to update my contact information.
Plaxo did that by downloading its members' entire Microsoft Outlook contact files, automatically sending out e-mails to everyone on them, transferring all the corrections received and then sending the updated file back to the owner. A very convenient service for those who took part.
But the nagging question remained: What else is Plaxo going to do with all those names, phones and e-mails?
First, a little relevant history. For 20 years until 2005, I worked part-time with computer industry guru Esther Dyson, known by the entire industry in the '90s, but not as much today. I edited her monthly $1,000 newsletter and attended her $5,000 executive conference, the PC Forum.
That event attracted just about every software CEO and CTO who mattered, all the leading venture capitalists, every reporter of consequence covering computers, and of course, the heads of every high tech PR agency. Bill Gates was a regular attendee for years. It was Silicon Valley's three-day break every March in the Arizona desert
At the PC Forum a few years ago, the audience of 750 of the most computer-savvy people in the world was asked this simple question: Who trusts Plaxo? Not a single hand went up!
LinkedIn has put itself in the position of becoming the next Plaxo.
The company did not respond to five requests to talk about what follows.
LinkedIn started simply enough almost five years ago. It was a Web service automating and facilitating the kind of business networking we all do. You joined for free, filled out a simple profile, asked your friends to connect to you by filling out their own profiles, and then, maybe asked them to introduce you to someone they knew and were already connected to.
At the time, I thought it harmless and, personally, fairly useless -- since whenever I am asked for an introduction to someone I know, I simply send an e-mail to both of them as I always do.
Though it seemed like a gimmick at the time, the guarantee was that no one could find you, read about you or contact you except by linking to people personally linked to you. The system would show you how to reach someone by linking through at most five other members. Like five degrees of separation from Kevin Bacon. Don't know how many bothered.
But you had privacy; you had your friends, strangers had to be introduced; no one could just tap you on the shoulder. That was the deal -- at the beginning.
Then the numbers started skyrocketing, tripling this May over the previous year to 23 million, with 1.2 million being added every month. But the demographic is the real killer: The company says the average user is 41 years old, earns more than $110,000 a year and is at the director level or above at work.
Who could resist making money off such a group (called "monetizing" in Silicon Valley, where LinkedIn is located in Mountain View, Calif.)? You could try to sell them something or just sell them all to someone willing to buy. That is, if you're willing to violate the fundamental covenant of membership.
LinkedIn did a little of the former with selective online advertising (such as from Porsche) targeted to profile characteristics, but mostly chose the latter.
It started selling individuals Premium Business and Premium Business Plus memberships for $200 and $500 a year, respectively. With those accounts, suddenly you could search for people you didn't know and then directly send them an e-mail (which the company calls InMail).
While this seems to have been intended for the original networking purposes or even for getting answers to business questions, recruiters were quick to take notice of this new access to a pool of passive and enormously attractive job candidates. And access depended on how much you paid.
The pricing is not public but account holders can search all 23 million members and get back their names and profiles, up to 1,000 with each search. They can do customized InMail blasts to groups of candidates (err ... I mean ... members), annotate their profiles, forward them to hiring managers and post jobs to LinkedIn's home page.
In short, LinkedIn is becoming a job board dressed in social-networking clothing. I feel suckered. When I'm promised privacy and then get monetized instead, I like to be asked first and then get a split of the take. At least when you post your resume on Monster, you know what you're in for.
The question is whether HR will want to buy access to a 23-million-person list, many of whom are unaware and haven't agreed to being searched and matched for jobs. Of course, I'm nuts. I can already hear recruiters screaming, "You bet we do!"
We'll see how the members react.
HR Technology Columnist Bill Kutik is co-chairman of the
11th Annual HR Technology Conference & Exposition® in Chicago, Oct. 15 to 17. Read the full agenda and register before the discount expires on Aug. 1 at www.HRTechnologyConference.com . He is also host
of The Bill Kutik Radio Show . He can be reached at email@example.com