By Nikita Geldenhuys

A rollercoaster of a year for LinkedIn

Things were not looking positive for the social platform in early 2016 when its stock reportedly had its “worst day ever”.

The social network released its fourth quarter and full-year 2015 results on 4 February, indicating it expected first quarter 2016 adjusted earnings per share (EPS) to be $0.55. According to Business Insider, analysts estimated this figure to be $0.75.  

LinkedIn also projected full-year revenues of $3.6 billion to $3.65 billion – lower than the $3.9 billion analysts predicted. These figures, coupled with the news of quarterly and full year losses, caused the company’s shares to plunge by 44% on 5 February 2016 – said to be a three-year low.

Some users have said LinkedIn is not as useful as it used to be for reaching new audiences and making valuable connections. Competitors may also rise as platforms like Facebook’s Workplace venture into the professional platform space.

On the upside, Microsoft’s announcement in June that it will acquire the network for $26.2 billion caused LinkedIn shares to rise 47%, according to CNBC. The platform recently also launched LinkedIn Learning, is looking into bots, and plans to take on the ambitious task of mapping the world economy.

Not just a recruitment network

Another positive that the company can count is that it is still showing growth, where some social networks have experienced a slowdown. Marius Greeff, founder and director of Turn Left Media, which represents LinkedIn locally, says the platform recently surpassed five million users in South Africa. “It remains one of the fastest growing social media platforms in the country due to its ability to provide both members and brands with a platform that allows for education, engagement, and growth.”

It’s also still a go-to platform to reach professionals, Greeff points out. “For marketers, no other platform provides the same scope in the quality of the audience, whether it’s professionals, high net-worth individuals, entrants into the business world or any one of the hundreds of targetable audiences you can find on the platform.”

Mongezi Lupindo, social media manager at FCB Africa, attests to the success of these audience targeting capabilities; “LinkedIn as a professional social network is an effective platform for reaching B2B markets. Its targeting options are a big plus as we’re able to publish relevant content organically whilst reaching the right people.”

He explains the platform is also well suited to publishing long-form content. In the B2B industry, long-form articles enable professionals to position themselves as thought leaders – a feat that is difficult to achieve on other social networks.

LinkedIn’s advantage over competitors boils down to three things, according to Greeff: with its early adopter strategy, it was able to create and maintain a unique selling proposition that’s been difficult to match; it provides a member-first focused experience; and has diversified its utility to users beyond the traditional “let me post a CV” feature.

Life for LinkedIn, post-acquisition

Microsoft’s track record with some of the companies and divisions it acquired in the past has not always been stellar, as Tom Warren at The Verge explained in May.

Madeline Farber at Fortune also suggests that Microsoft will need to either generate drastic improvements in LinkedIn’s profits, or steer many millions of the platform’s customers to its products, to make the deal a financial success.

She believes, however, that Microsoft could help tame what she calls seemingly “undisciplined spending” at LinkedIn.

Greeff is not expecting any major changes to the platform after the acquisition is completed; “From what we can tell, there will be no overt changes occurring within the businesses. Both Microsoft and LinkedIn are still going through the regulatory processes necessary to seal the deal. However, the scope for the utilisation of Microsoft’s reach and LinkedIn’s wealth of data seems self-explanatory.”

He notes that, if the deal is sealed, the social network may get access to a “war chest” and gain more freedom to accelerate its product roll-outs to brands and customers.

And for now, LinkedIn remains high up on the list of ways to reach B2B audiences, as Lupindo points out; “LinkedIn [still has] a higher engagement rate than most social media platforms. I’m excited about the blogging platform as it allows the brand that I manage to create valuable long-form content to a captive audience.”

Greeff points out that platforms continue to face competition in their quest for relevancy, both to users and to advertisers. “Whether it is the latest trends in programmatic, video or messaging and bots, platforms need to fight to maintain the careful equilibrium necessary to survive in the fast-paced and highly aggressive market.”