Developing news this morning that Facebook may be about to add a job feature to its site has left analysts pondering the potential negative implications for professional networking purveyor LinkedIn.
This latest development might not come as such a surprise as back in October Facebook announced a partnership with the U.S. Labour Department and other partners to provide job-hunting resources. At the time, Facebook stated that ‘the partnership will explore and develop systems where new job postings can be delivered virally through the Facebook site at no charge.’
It is expected that some will see the latest move as an extension of this partnership with the Labour Department and with unemployment so high and an upcoming election, this may help give positive exposure to Facebook.
So whilst this latest news doesn’t perhaps yet signal that Facebook is making a full blown entry into the job recruiting market, it’s clear to see a potential threat to other professional networking sites, such as LinkedIn, if Facebook pursues the project with progressive seriousness in the future.
Currently, at least three of the companies already working with Facebook, BranchOut, Jobvite and Work4Labs will be involved in the project, which some are speculating could be launched as soon as early August and would make things difficult for LinkedIn.
It’s interesting to note that whilst previously many job seekers have been reluctant to share information on Facebook and have considered it a liability when finding a job, many companies and corporate recruiters already use the social networking site to recruit new employees. Several large companies have now adopted the use of Facebook career pages to attract suitable employees and recent graduates.
Victor Anthony from Topeka Capital Market’s is quoted as saying ‘We do view a career services business as a logical extension of the platform and an attract one, given that the $100 billion global career staffing market, per IDC, is largely offline. However, whether Facebook is able to monetize this category in a meaningful way remains to be seen. Several Facebook users we polled indicated a preference to keep their online social networking and professional networking activities completely separate, suggesting to us that LinkedIn could remain insulated near-term by actions by Facebook in this area.
This view was somewhat supported by Doug Anmuth of JP Morgan, stating ‘we believe many user will want to keep their social and professional profiles somewhat separate online’.
Mr Anmuth is quoted this morning as reiterating an overweight rating on shares of Facebook and a $45 price target, stating although the latest moves suggests lines are blurring between profession and personal social networking sites.
Mr Anmuth goes on to say there is also an overweight rating on LinkedIn shares and a $135 price target, though he concludes ‘we do not view it as a material threat to LinkedIn and we would view any material weakness as a good buying opportunity’. In conclusion, it would appear the view is that currently it is unlikely that the move by Facebook is an immediate threat to LinkedIn.