Both are social networks, but one company focused on personal friendships while the other was all about professional networking. The two companies still have entirely different monetization strategies. Facebook Inc (NASDAQ:FB)’s business is built on advertising at 85% of revenue last quarter, while only 23% of LinkedIn Corp (NYSE:LNKD)’s sales come from advertising.
Nowadays, Facebook Inc (NASDAQ:FB) and LinkedIn Corp (NYSE:LNKD) are finding themselves more at odds than ever. Facebook has been trying to grow its professional status, and LinkedIn is aggressively expanding into content and launching new social feeds. LinkedIn has just fired another shot.
The professional networker is announcing new Sponsored Updates, which will allow businesses to broaden their reach within LinkedIn Corp (NYSE:LNKD)’s user base of 225 million members — for a fee. The new Sponsored Updates will be available on a wide range of devices including desktops and mobile gadgets. They’re not unlike Facebook Inc (NASDAQ:FB)’s Sponsored Stories, which appear throughout the company’s social feeds.
This isn’t exactly a surprise considering LinkedIn Corp (NYSE:LNKD)’s recent focus on content. After all, advertising is easily the most common way to monetize content on the Internet.
Growing the marketing business is an incremental opportunity for LinkedIn Corp (NYSE:LNKD), and one that shows how asymmetrical its rivalry with Facebook Inc (NASDAQ:FB) will be. To the extent that LinkedIn can grow its content offerings, traffic, and advertising business, it can compete directly with Facebook for ad dollars. Meanwhile, its core business of connecting recruiters with job candidates is somewhere Facebook can’t venture.
Facebook Inc (NASDAQ:FB) has reiterated countless times that it will never impose a membership fee, greeting prospective new Facebookers with the assurance that “it’s free and always will be.” Facebookers also loathe the idea of the social network selling their data to advertisers, although that probably doesn’t dissuade most people from using the site.