Monday, January 4, 2010

Xing vs. LinkedIn: Round II - a Macro to Micro and back to Macro Again Overview

Readers to my earlier post entitled "Low Tech Germany! Who Knew?" will be aware that my initial experience with the Xing network was reasonably less than positive. Joining in early December I found the sign-up to be a rather taxing experience and then once I got it up and running it just sort of sat there. Good news abounds since then though as Xing was just beginning to release a number of upgrades to bring it fully out of what I had described as Web 1.0 and into full Web 2.0 performance. But more than that, I was intrigued that Xing was up for any length of time with as much success as they had had considering the clumsy interface I encountered, so I decided to do a bit of homework. What follows, begins with a Macro overview of both services and then works into a Micro look into daily functions and overall usability from a user standpoint - with a pretty good understanding of where Xing is headed, at least, technically. And then back to Macro for the finish. So let's get started. For our Macro view I'm going to use a lot of data from Wikipedia, which yes, I know, I know, could be dodgy but it's some of the most current I've found at this time.

Xing, LinkedIn, OpenSocial, Lars Hinrichs, Nintendo, Jason Goldberg, SocialMedian,  Leo Burnett, Hamburg, Shrek



- Typ
e: Public, (AG)
- Founded: Hamburg, Germany (2003)

- Headquarters Hamburg, Germany
- Members: 8.3 million (Source: Xing)
- Key people Dr. Stefan Gross-Selbeck, CEO, Ingo Chu, CFO, Burkhard Bluhm (Executive Board), Lars Hinrichs ...(Founder)
- Revenue: €
25.09 million (QI-QIII 2008) $36.15 million USD (Source: Wikipedia)
- Website: Click under "Xing Me" in the sidebar
- Ale
xa rank: 268 (Source: Alexa)
- Type of site: Professional network service

- Registration Required
- Available in: Chinese, Dutch, English, Finnish, French, German, Hungarian, Italian, ..Japanese, ..Korean, Polish, Portuguese, Russian, Spanish, Swedish, Turkish

Xing, LinkedIn, OpenSocial, Lars Hinrichs, Nintendo, Jason Goldberg, SocialMedian,  Leo Burnett, Hamburg, Shrek



- Typ
e
Private. Funded by Greylock, Sequoia Capital,[5] Bessemer Venture Partners, the
..Euro
pean Founders Fund and Bain Capital Ventures.
- Founded: Mountain View, California (2002) Launched 2003

- Headquarters: Mountain View, California
- Mem
bers: 53 million (Source: Wikipedia)
- Key people: Jeff Weiner, CEO previously a Yahoo
executive. Founder Reid Hoffman,
..Chairman of the Board. Dipchand Nishar, Vice President of Products.

- Revenue: € 11.77 million (QI-QIII 2008) $17 million USD (Source: Wikipedia)
- Website: Click on "LinkedIn" in the sidebar

- Alexa rank: 42 (Source; Alexa)
- Type of site: Professional network service

- Registration Required
- Available in: English, Spanish, French and German


So let's go through the big points: #1) Xing is a public company and LinkedIn is private. Basically, this makes Xing a whole lot more interested in generating income now as opposed to later with stockholders and quarterly interests to satiate. #2) Both sites were launched in 2003, so that makes them essentially the same age - in virtual terms. #3) Here's where things seem to go strongly in LinkedIn's favor - Members: Xing clocks in with a self reported number of members of 8.3 million members whilst LinkedIn sports over 50 million - 5 times that of Xing. #4) But let's not jump to profit conclusions by looking at member numbers. If LinkedIn has 53 million people and took in revenue of €11.7 million that (in a rough, not financially verXing, LinkedIn, OpenSocial, Lars Hinrichs, Nintendo, Jason Goldberg, SocialMedian,  Leo Burnett, Hamburg, Shrek y accurate calculationXing, LinkedIn, OpenSocial, Lars Hinrichs, Nintendo, Jason Goldberg, SocialMedian,  Leo Burnett, Hamburg, Shrek ) would be around 8 and a half cents € for the entire year or for the Americans out there, less than 12 cents for the whole year. Xing by contrast with just 8.3 million members brought in €25.09 million adding up to around 30 cents € for each member or 43 cents American per member - but wait, "All the members didn't pay, right?", you say. And that's exactly right. It's estimated that fewer than 10% of Xing members pay for a premium membership, but the point is, that they do pay, 6€ per month or so but that's coming from well less than a million members and it makes the site, very, very profitable. (Income from partner agreements and recruiter accounts on either site is not publicly available so can't be broken out here.) #5) On Alexa rank, LinkedIn pretty much clobbers Xing but with the financials already discussed, I don't think anybody at Xing is going to be breaking a sweat. We'll go through some more financials later and you'll see that Xing is certainly not afraid to spend a bit of that for growth. With a steady paycheck coming in, who wouldn't, considering the growth available in the market? The Alexa charts here indicate web activity for both sites - one for a few months and the the other for two years. LinkedIn is, on the left, the big wavy blue line and , on the right, the jagged red line - Xing is the rather tepid line at the bottom of both charts. I'll come back to these charts later but suffice to say, if I had a chart for financials, it would look somewhat like these two - that is if you reversed the Xing and LinkedIn captions. Xing is basically kicking LinkedIn's butt on the money front. #6) Our last big point here is in languages served. LinkedIn clocks in with 4 and Xing with 16? Yep, you read that correctly. Now I've been able to work through Xing pretty well in English but I will say that since it's German based, and well over 1/2 its members are from Germany that not everything works perfectly in English - for instance when you need help or want to sign up for another service - the forms are in German. How Xing manages the sixteen and counting little networks it currently houses inside their one, still not very big network, will certainly be something to watch - and they have an office in China. I'll get to that later as well. Could they breach China's Great Fire Wall?

So that's the Macro. In a nutshell LinkedIn is a helluva lot bigger in terms of members than Xing, but Xing is infinitely more profitable than LinkedIn. In this business scenario, who would you like more to be? Methinks a little bit of both of these guys would like to be the other. But I'm going to focus more on Xing today because I'm in Germany and it's my current fascination. So with LinkedIn pretty much kicking butt on membership how do you go about competing? Yes, both services charge for a premium membership (and I'm currently getting my Xing premium for free because I signed up enough new members) but LinkedIn is just way over priced for their premium services and I have a network large enough (Over 300) that I don't seem to need much of what they offer. Xing on the other hand, already has a loyal subscriber base, so how can you grow that? Enter OpenSocial.

Let's get a little more Micro. OpenSocial is a set of common application programming interfaces (APIs) for web-based social network applications, developed by Google along with MySpace and a number of other social networks. It was released November 1, 2007. For all us non-geeks what does that mean? It means all those little apps that let you see a block of Facebook updates, or your friend's Tweets or latest blog posts - all in real-time. It enhances the user experience. And this was what Xing was missing when I checked in just a month ago. I had become reasonably addicted to all this seemingly senseless activity but when I first checked into Xing it didn't have any of that, and I missed it. To quote Xing's founder, Lars Hinrichs, "it is ostensibly more important for people to know what their contacts are doing than to follow the latest news events from around the world.” LinkedIn started to integrate OpenSocial APIs in 2008 so what did Xing do? They bought a site that already had them.

And even mXing, LinkedIn, OpenSocial, Lars Hinrichs, Nintendo, Jason Goldberg, SocialMedian,  Leo Burnett, Hamburg, Shrek ore Micro. Now for the princely sum of about $4 million in cash and stock, and a performance-based earn-out valued at between 0.5-2.5 million Euros payable over three years, I'd guess that Jason Goldberg wasn't too unhappy parting with his baby, SocialMedian, considering that I'd never heard of it and probably you haven't either, and from what I've seen it looked pretty much like a Digg or Mixx clone. But at USD $4 Mil and Euro change? Things could suck a whole lot worse.

Xing, LinkedIn, OpenSocial, Lars Hinrichs, Nintendo, Jason Goldberg, SocialMedian,  Leo Burnett, Hamburg, Shrek But what Xing seemed to buy in SocialMedian, much more than just a working package of OpenSocial APIs was a real motivator in Jason Goldberg. from New York. As founder of Jobster, he had said that Monster.com had a "crap product" in their user experience (and he's right) but what's even cooler was that that comment got to YouTube, and you know what? It looks like he's exactly what Xing needed. If you're the challenger, you need to have a little piss and vinegar. The David vs. Goliath story is only a good one if you truly believe that Goliath is an asshole. If he's Shrek, it's just no fun. So for the whole of 2009, Goldberg worked in Hamburg with Xing implementing his self-stated "Ship it" mentality. "Make mistakes, ship it! That is not always in line with the traditional way of doing business in Germany, yet the team embraced it and lived up to it. I think it’s important to have an environment where people feel they can make mistakes; that’s absolutely critical for innovation. You also need to ship it, to get user feedback and improve your product according to the users’ wishes. If there is one thing I am most proud of regarding my year at XING, it’s how the XING team embraced ship it.", he said in an interview about his time at Xing.

And now to teeny tiny micro. All that hard work done, and it does seem that Goldberg was a real motivator, but I didn't see a bit of it when I signed up for Xing in early December of 09. Tons of work done in the back room and little of it visible out front, where it basically counts - a bit like dropping the ball right before crossing the goal line. For instance, the function for finding my Xing contacts based on my Gmail account never worked properly - and when I went through listing all my other social network accounts, there was no mention of their new Twitter interface or how to put it on my homepage. (Also no way to put my LinkedIn account, and I think this is a huge mistake. Rather than regard LinkedIn as competition Xing should realize that heavy users will have both accounts and at least canibalize their bigger brother for those of us who want them both. There's 45 more million qualified customers to hit. Easily.) Only later, after seriously digging into the site, and really searching features out, did I find out how to use them. Xing's homepage needs to do a lot better job of pointing out new features and encouraging usage every time I sign in. Things should be a whole lot easier than I found because I'm on everything from Digg to Mixx to Twitter, Facebook, Linked in and a few more and Xing's been the hardest of all for me to negotiate as a new user.

When NXing, LinkedIn, OpenSocial, Lars Hinrichs, Nintendo, Jason Goldberg, SocialMedian,  Leo Burnett, Hamburg, Shrek intendo was my client at Leo Burnett, I learned a very important thing from their programmers. In that business it is said that when a new game comes out, way beyond the graphics or the storyline, that a kid needs to feel a real level of success inside of 15 minutes with it, or you have lost him forever. I can't imagine that most business people have much more patience than a twelve year old boy. Something to keep in mind, certainly. And how to do that? Well since I'm in that business, I don't think I want to give all my best consulting away for free so I'll just give a hint: 65% of the population are visual learners. Currently, I don't think there's a single social networking site (save for possibly MySpace) that makes good, productive use of this fact. I think there's a real opportunity here.

And now finally, way back to Macro. Having painfully negotiated Xing and gotten over 40 contacts, a number of groups and all my bells and whistles working, there's one thing that Xing does better than LinkedIn or Facebook ever have - and that's making real contacts. The deluge of party invites I get, and the actual events, even the shitty ones, are more than I've ever seen from my plethora of networks. Here's a network that actually works. That needs to be communicated much better. And that's where we get to the real bottom line. Scroll back up to those two graphs and look at the one that's a two year graph, and see how Xing, with the line way at the bottom, takes a tiny spike up at the beginning of 2009 (presumably due to the multi-million Euro purchase of networks in Spain and Turkey) and LinkedIn just goes through the roof. That's called buzz. And Xing could use a whole lot better buzz than I found when I arrived in Germany, their home country, and now my home country. Once they do that they'll get their bottom line buzzXing as well.

Post Script: I posted this late morning yesterday, Tuesday, and by mid afternoon had a note from staff at Xing and by evening a Twitter follower from LinkedIn. Maybe this blog's Google page rank moving from a 3 to a 4 over the weekend is having some effect. Think so? Nah...

For more on digital marketing and social networking see:

Xing vs. LinkedIn: Round II
Trial and Error: The New Normal
What's Wrong With My Social Networking? Xing vs. LinkedIn I
Low Tech Germany. Who Knew?
Advertising People and Blogs
How to Write the Best Blog in the World
What If Gutenberg Had a Blog?
If Blogs Are Free Does That Make Them Worthless?
Detri-Viral Marketing II: The Top 10 Social Media Blunders
Bright Lights, Big Internet and the WWED
Saigon Digital Marketing Conference Successfully Avoids Plumbers Convention
A Tale of Many Marketing Conferences
Detri-Viral Marketing I: How Web 2.0 Can Go Against A Brand
Marketing Predictions for 2009
Barcamp Saigon 2008
"Ignore Everybody" is Born: A Plug for Hugh MacLeod
Are the Bloggerati Missing the Market? Asia has Risen,
Into the Gapinvoid - Web 2.0 Social Networking Born 20 Years Ago



7 comments:

  1. Xing offers me more quality German contacts than Linkedin and a greater ability to FIND the people in Germany I am interested in. There is also less trash on Xing. I find some pretty depressing posts on Linkedin - people who are just flogging some 2nd rate product. I will continue to use both. I started out with Plaxo, because of its (then) feature which asked contacts to update their information. That has since been dropped, but I continue to use its synching capacity and card-sending capacity (there are about 5 images among the 100's that are pretty good).

    ReplyDelete
  2. Speaking of difficulties - I just wrote out a long comment and now its gone..... In a nutshell: each offers something, but for German contacts, Xing is better.

    ReplyDelete
  3. Ah... now I see it! Sorry.

    ReplyDelete
  4. Rob;

    Right. I've found Xing to be indispensable in Germany and LinkedIn to be exactly what you say: A bunch of low-end recruiters and SEO salesmen just wasting my time. Where are you and what do you do? I'll look for you on Xing.

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  5. David,

    And I thought I was the only American in Germany that saw the Xing vs. LinkedIn situation so. Guess not. laugh.

    I congratulate you on a very interesting and insightful read. Will most likely stop back in every once in a while to see how you are getting along.

    Chuck

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  6. and just in case you're interested here is my xing link https://www.xing.com/profile/Charles_Williams

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  7. Thanks Charles. I'm still rockin'

    ReplyDelete

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