Tag Archives: user

How Linkedin gets 20x more money per user than Facebook

Forbes has LinkedIn CEO Jeff Weiner on the cover—but the professional social network’s business model is the real hero of the story.

Here are some of the amazing statistics Forbes’ George Anders reports:

  • LinkedIn users spend an average of 18 minutes a month on the site. Facebook users spend 6.4 hours a month.
  • But LinkedIn gets $1.30 in revenue for every hour those users spend on site. Facebook: 6.2 cents.
  • Anders describes LinkedIn’s most expensive product offering, LinkedIn Recruiter, as a “Bloomberg terminal” for talent scouts. It costs up to $8,200 a year per “seat,” or user license.
  • Adobe, a big LinkedIn customer, has 70 seats. At list prices, that’s about half a million in revenue a year from a single client.
  • LinkedIn’s top salespeople make as much as $400,000 a year selling Recruiter.
  • LinkedIn spends 33 percent of revenue on sales and marketing.
  • LinkedIn’s profits are expected to double this year to $70 million.

 

Via - How LinkedIn Gets TWENTY Times More Money Per User Than Facebook

 

**Note: Facebook’s profit in the last quarter was $205 million on revenue of $1.1 billion.

 

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Netflix meets its heaviest user – 252 movies in one month

Mark Malkoff just can’t help himself. The new York-based comedian is one of those people who find challenges in everything. So when a company like Netflix offers unlimited streaming for $8 a month, someone like Malkoff starts to wonder about his own limits. Earlier this year, Malkoff embarked on his Netflix challenge in an attempt to figure out how much value he could get out of his $8 subscription within a single month. 30 days later, Malkoff had watched 252 movies, beginning to end, including the credits.

**that’s 8.4 movies/day**

Excessive use like this might have triggered automatic service suspension at other companies, but quickly Netflix realized the promotional potential of his challenge, and started tweeting about it. This week, the company even invited him to their headquarters where dozens of employees celebrated him as the most obsessive user the company ever had.

This isn’t the first time Malkoff has taken on an endurance challenge like this. A few years back, he successfully visited each and every of Starbucks’ 171 stores in Manhattan within 24 hours, consuming something at every store. Malkoff has also lived in an Ikea store for a week, and spent 30 days flying on an AirTran jet.

Read the full storyThe day Netflix met its heaviest user

 

Mark’s Netflix Challenge:

Is Craigslist is done for? (nope)

This is part 2 and it messes everything up.

Part 1 was incredibly convincing and most of us bought the argument, hook-line and sinker.

We were ready to write-off Craigslist.

Now, I present the counter-argument. This piece will completely change your mind. It will challenge you to re-think everything and in my case, put Craigslist back on the map for good.

Enjoy.

PS – It works better if you read the original piece first: Is Craigslist done for? (yep)

From Quora

Josh Hannah argues that the premise of this question is false and that Craigslist “has been disrupted.” He mistakenly confuses “competition” with “disruption.”

Craigslist has not been disrupted.

Disruption means to “drastically alter or destroy the structure of (something).” By definition this means that disruption is easy to spot. Something new comes along and crushes an existing business model or technology or product.

Here are a few examples:

Business model disruption:

  • Craigslist disrupted classified advertising
  • CPA disrupted CPM
  • Free has disrupted numerous other industries (telecom, media, etc)

Technology disruption:

  • Cars disrupted horses
  • Downloadable media disrupted CD’s & DVD’s
  • Digital photography disrupted film

Product disruption:

  • Facebook disrupted MySpace
  • Google disrupted AltaVista & co

In every case:

  • The disruption happened suddenly (within a few years)
  • The disruptor’s value proposition was unambiguous
  • Usually a single replacement (business model, tech, product) filled the void

This is what disruption looks like with websites:

This is what disruption looks with offline businesses:

This is not disruption:

…Nor is this:

Josh argues that:

“Bad sites with network effects show much slower decay in use than they should based on their absolute quality. (think eBay.) Bad sites who price most of their product at free show incredibly slow decay in use. (think Craigslist).”

All of this is true, but this is precisely why Craigslist is not being disrupted: It already benefits from enormous network effects, which aren’t being replicated by its myriad competitors. Even if all the sites below shared the same audience as Craigslist (they’re not even close), these users would be split across 30 different sites:


Yes, plenty of people are picking apart categories and trying to improve upon the product, the UI, or the way the information is presented. This has been happening for years and many of these companies have gone under. If you think about it, these companies aren’t really competing directly with Craigslist because Craigslist–unlike every site above–is free.

To argue the image above is indicative of disruption is to misunderstand why Craigslist is successful. How many companies compete with Google in search, advertising, social, apps, mobile? Sheer volume of competition does not signal disruption.As I wrote previously, Craigslist benefits from a killer product/business model combo that protects it from the effects of these startups:

Craigslist = Simple + Free + Network effects + Anonymous

It’s very, very hard to compete with something that gets the job done well enough and is free.

People can criticize the product/UI/search all day long, but minor tweaking is not going to disrupt Craigslist–particularly if it happens across 30+ fragmented sites. Most people have a status quo bias…they must see substantial and compelling benefits to changing their behavior. They won’t learn about all the sites listed above just so they can get a slight UI improvement when they want to unload their couch or casually rent a hooker. (Frequent escort renters might disagree with me :).

Even if someone rolled all 30 of these sites into one competitor with better features, UI, search, etc it’s still unlikely to succeed because of the power of network effects. Craigslist has them. The other guy don’t. And no one can afford to buy these network effects unless they plan to charge for their services. And if they plan to charge then they’re back to square one.

In summary (and forgive me for mashing these answers together):

This is a winner take all business that’s supported by incredible network effects, great brand equity, a degree of trust and familiarity. No upstart is going to unseat Craigslist without a huge & foolish capital investment. The only way Craigslist will be disrupted is if consumer behavior shifts radically away from free, online, and anonymous.