Could Another Business Platform Rise to Compete with LinkedIn?
Executive Summary
- LinkedIn appears to be in terminal decline under Microsoft’s management.
- We cover whether it is possible for a competing business social platform to rise and what would happen if it did.
Introduction
This topic started as a discussion around the article How LinkedIn Has Degraded as a Content Platform. With the decline of LinkedIn under Microsoft, the question was posed as to whether a competing platform could compete with LinkedIn.
Our References for This Article
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Monopolistic Control Over the Business Social Media Market
LinkedIn was one of many competitors that eventually came to win in the business social media space. LinkedIn is so dominant that I can’t even recall the next largest business social media website, which means that whoever has a minimal market share. Once LinkedIn took most market share in business social media, they became a target for Microsoft and other oligopolies like Salesforce.
There was always minimal natural overlap with Microsoft, and it brings up the question as to why Microsoft purchased LinkedIn in the first place. Ever since the acquisition, Microsoft has been tightening the screws on LinkedIn and increasing the various LinkedIn plans’ prices. This is true, even though because LinkedIn is just one website, Microsoft incurs a negligible cost in maintaining the website. Microsoft has to maintain a single site with LinkedIn yet had hundreds of millions of users. It has enormous economies of scale and income, and it only has to maintain one site. However, it is not capable of doing it in a way that provides a competitive experience.
This, of course, follows how Microsoft fleeces its software buyers.
Why the Price Tag of LinkedIn Setup LinkedIn for a Decline Under Microsoft
At a $26 B acquisition cost, now the need to “get and ROI” on the acquisition has lead to the need for more monetization.
This is how nearly all acquisitions work.
They result in the customers getting stabbed to pay for a valuation that never had to occur in the first place. This is how Harvard MBAs “add value” to the economy — by determining which customer bases can be stabbed and then directing the purchase of companies that serve these customers so the stabbing can commence. Naturally, the term price gouging is never used. Instead, the terms “synergy” and “value add” are preferenced when news of the acquisition is communicated. This is because it is considered very rude to use the term “stab.” However, it is not considered rude actually to stab your customer in reality. This stabbing plan was described in an article by Peter Cohen, who paid to have an article published in Forbes about the LinkedIn acquisition.
Nadella touted the idea that business people working on projects will love the way the combined company will be able to spam them with more targeted newsfeeds!
Is this the kind of magic that $26.2 billion buys?
It sounds like a good reason for me to dump my LinkedIn account.
Nadella’s plan from the outset was to degrade the LinkedIn user base with ads. Naturally, Nadella would not use the term “degrade” because Nadella is only thinking from the equation’s producer side, not from the user’s side of the equation. Although Microsoft would have had to have obtained a reasonable price on the asset for degrading the platform to pay off.
How Microsoft Degraded The Investment by LinkedIn Members into LinkedIn
Like all social media websites, LinkedIn benefits enormously from the investment on the part of members. Virtually all of the LinkedIn content in their form of profiles, messages, and articles are put there for free by users. And LinkedIn charges for access to what is information placed there for free by members. Most LinkedIn users invested in LinkedIn back when it was independent and a better platform. Then Microsoft came by, and through their acquisition and management and changes to LinkedIn, they degraded the users’ collective investment by purchasing LinkedIn and capturing this user investment. LinkedIn users did not know that all of the investment they made into LinkedIn would eventually be owned and controlled by Microsoft.
The Bait and Switch for LinkedIn Users
If LinkedIn had employed its present policies, present cost level, current technological competence (LinkedIn under Microsoft has become a bug-filled experience with close to zero customer service), it is improbable that LinkedIn would have emerged victorious in the business social media segment. Before the Microsoft acquisition, LinkedIn had a highly competent website that added a lot of value to users’ lives and charged its users reasonable prices for its various plans.
That all changed under Microsoft.
However, the problem for users is that all of them have already invested in the LinkedIn platform. You now essentially have to be on LinkedIn to access other people. Now that the investment has been made, it would be tough for a competing business social media platform to pull users away from LinkedIn in a sufficient number to create a feasible competing platform.
But let us imagine for a moment it was possible.
The Improbable Scenario of a Competitor Arising Versus LinkedIn..And Likely Outcome
Suppose we play out an alternative scenario where another platform becomes popular and replaces LinkedIn. This would take several years and would never be complete. However, even if “LinkedIn Part Deux” were created, it could be purchased by Oracle or any other oligopoly once it reached a critical mass, again undermining the investment in the platform by those that adopted it. Amazon, Oracle, Microsoft, Wal-Mart, etc.. are basically saying there is no place you can run from us. We own your legislators, and we will consolidate the various sectors of the economy as we see fit. When these acquisitions were announced, you can get sure that the establishment media would not bring up such an acquisition’s negative impact. Words like synergy and strategies would flow like wine from freshly opened bottles in the articles. I could not find a single article that discussed the monopolistic impacts of the recent Salesforce/Slack acquisition. Naturally, if we don’t enforce anti-trust law, we will be continuously blocked into oligopolies’ bad options.
Conclusion
LinkedIn users will take what LinkedIn is dishing out, and if we don’t like it, Satya Nadella would like LinkedIn users to jump off a bridge.
That means LinkedIn will do the following:
- Increasingly promote low information and false information posts and de-emphasize posts that are not promotional.
- Increasingly serve as a propaganda distribution mechanism, maximizing the amount of false information on the platform.
- Increasingly move to ever more elaborate methods to fleece their users.
- Continue to do other types of unethical behavior like apply Big Data on the information shared by users for corporate espionage and other forms of IP theft.
How Few and Bad Options Equals a “Free Market”
All of the oligopolies are in agreement that we need not have any good options. The term both conservatives and Neoliberals apply for terrible options and oligopolistic control over nearly every sector is the “free market.” The term applied to anyone who disagrees with oligopolistic control over every sector with no anti-trust law enforcement is a “communist.”
And they will pay the media entities to cheer on ever more consolidation. And the media entities will do as they are instructed. The media covered in this article served the interests of Microsoft/LinkedIn by providing Microsoft/LinkedIn-approved information to readers who thought they were reading independent journalism.