LinkedIn Will Eventually Buy Quora
Last month, I took a stab at projecting the long-term aspirations of the biggest Web 2.0 companies. Some look more on target everyday such as Facebook becoming Microsoft. Some still seem far out into the future such as Foursquare morphing into American Express. Still others seem dead on like Tumblr being the next big shitstorm. However, one company that has intrigued me of late is LinkedIn and where it sees its future.
My initial guess was that LinkedIn wanted to be Monster. However, that is idiotic. Monster and many of the other job boards are in a losing business model. While the niche boards are doing well by tightly targeting and consolidating specialized pools of talent, broad properties like Monster are simply spread out too wide and the talent depth is too shallow. Why would LinkedIn, which just had its IPO and is in a fairly strong brand position go backwards to be just another job site?
Then it occurred to me, LinkedIn does not want the job boards, it wants to own the websites of the companies that send over the postings. That is what all of the work in building out company pages and the follower functionality around those pages is all about. LinkedIn wants to develop social communities around companies listed on LinkedIn to create stickiness that simply does not exist on corporate websites today.
Every corporate website is a piece of crap. Ugly, formulaic, unintuitive, obtuse, and uninformative are just some of the many words that could be used to describe the state of the corporate website today. Granted there are some exceptions, but by and large most websites act merely as branding shingles on the Internet. It is an online presence for the sake of having an online presence.
What should a corporate website do well? At a minimum, it should describe why the company exists, provide product and service information (without all the marketing speak), service existing customers, inform investors, and attract job candidates. It is this last category of employment opportunities that most company websites provide the least value. In the one chance that companies have to pique the interest of potential candidates, they totally flub the opportunity.
Some startups are beginning to see the opportunity to reinvent the corporate jobs page. One such company is The Daily Muse, which has already developed well designed and informative pages that highlight company culture and give potential candidates an inside the ballpark experience. The kicker is that companies are paying good money for this service because they are starting to realize that their jobs page can be a more powerful and useful recruiting engine. It is no longer just about the job posting and job boards; the new wave of recruiting is in culture fit and selling the culture.
LinkedIn sees this opportunity as well to “own” the online corporate presence. They lost on being a social network to Facebook. People simply do not spend anywhere near as much time on LinkedIn as they do Facebook (17 minutes per month versus 405 minutues). They are not generating much traffic with advertising which is dominated by Google and Facebook and now Twitter. The one area of business that is strong however is the recruiting and search products. With over 150 million professionals and their profiles in their databases, they have a pretty captive audience with which to promote its over 2 million company pages, and an easy case to take back to those very companies to buy more product.
Which brings us back to the original point: why would LinkedIn be at all interested in Quora? The answer is that LinkedIn needs a better engagement mechanism than exists today. In order to correct that issue, LinkedIn needs a better user experience and a reason for people to remain engaged with the site. While LinkedIn has had some success with its LinkedIn Today social news product, the rest of the site is dull and uninviting and does little to entice users. The only other potential high engagement products, LinkedIn Questions and Groups, have devolved into dirty cesspools of spammy loserdom and needy has-beens.
The addition of Quora could address both the engagement question and the user interface challenges. While there has been some carping that Quora is going downhill, the engagement quality is still very high, the user community is strong, and the site has a better engagement dynamic than any of LinkedIn’s products. By plugging Quora into the company pages, LinkedIn would instantly have a worthwhile product. Companies would be able to establish social communities with their followers, provide insights into their company, employees, and culture. They could build long term relationships with followers that could eventually bloom into a steady resource for job candidates or even business opportunities. In a sense, it would be Facebook for companies, but in a way that is less invested in by users and less marketing driven by companies than with Facebook Pages.
The real question is whether Quora is game. There are reports of a $30-50 million Series B valued at $400 millon, which would be an appreciable jump from the initial $11 million round at a $86 million valuation over two years ago. Clearly they and their investors see huge upside in the market even though Quora has been a rather quiet place on the Internet when compared with high flyers like Pinterest and Instagram.
However, with no discernible revenue model, no clear vision, and massive expectations, one has to wonder how much farther they can go. LinkedIn, with growing revenues, a $10 billion market cap, and the built in user base that Quora would love to plug into, it would seem like the natural fit even if the price might be a bit hard for LinkedIn to stomach. For its part, Quora is still a small team of around 30 employees with a strong engineering culture and a solid product. While it is still a long shot, we could be seeing the next big tech startup acquisition before the summer gets rolling.
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