Few companies are benefiting from the financial crisis, but business networking sites such as LinkedIn and Xing are doing just that. These sites have grown rapidly as economic conditions have soured. In the last several weeks, an unprecedented number of LinkedIn members updated their profiles, preparing themselves perhaps for the possibility they may lose their jobs.
LinkedIn and Xing provide platforms allowing business professionals to get their names out there, keep track of peers and industry leaders, establish new contacts and form groups with common interests.
LinkedIn is a privately held, Silicon Valley based company that has 29 million members. It was started in 2002 and is now valued at $1 billion on revenues of approximately $100m. LinkedIn’s revenues derive from members as well as headhunters and companies that pay to troll their databases.
Xing is a German company that has 6 million members. It was founded in 2003 and went public in 2006. It had revenues $24m in the first half of this year. Xing’s revenues derive primarily from subscription fees, because the site emphasizes networking rather than job search.
Their business concept now proven, these two companies now must fend off competition. Facebook has the capacity to play in this space, for example. Even the venerable Wall Street Journal and New York Times have nascent professional networking features on their sites.