The Rise and Fall of LinkedIn: A Recruiting Requiem.

stream_imgThere’s nothing new about M&A in the HR Technology Industry; after all, big fish swallows little fish is how most top tier talent vendors have ended up so bloated they can hardly move, much less run at the same speed as the smaller SaaS startups starting to dominate the landscape.

I’m not naming names (Taleo) but let’s just say when you have a user conference headlined by Maroon 5, you’re basically printing your own money living in the past.

The Rise of LinkedIn and the Decline of HR Tech.

Princess-Leia-plays-captive-to-JabbaYou literally cut the checks, then it doesn’t matter how the hell your sourcing functionality works, because your average employee could care less about your pipeline or the future of talent.

They just want to get paid on time, and the companies that do the decidedly unsexy job of providing payroll software and solutions fill a void that also means they get to use your money to hedge on overnights and make a killing of f(x).

If you don’t know what that means, don’t worry. That’s why you haven’t ever thought much about the mechanisms of that direct deposit program or why the front end of the time clock looks like it was built on Windows 3.1.

Somehow, LinkedIn has become one of those bloated behemoths, turning into the recruiting version of Jabba the Hut. This is one of the biggest problems with the evolution of what’s become a ubiquitous part of talent acquisition today – the fact that in order to continue the kind of growth required to keep shareholders happy (epic fail), much like an IBM or ADP, since it went from potential acquisition target to rich Uncle Pennybags after gobbling up so much market share that it became unrecognizable.

While its product leaves much to be desired, LinkedIn has established its current positioning in the HR Technology marketplace because, well, it’s got enough cash to do whatever the hell it wants, thank you very much.

No matter how much hubris there might be, if you’re a recruiter, whatever LinkedIn does becomes by far the biggest news in the industry because it’s the one product pretty much every. one. of. us. uses.

Yesterday, as word spread about the Mountain View Death Star’s latest purchase, content information aggregator Connectifier, the recruiting world again nearly fainted with people opinion on this latest M&A move (and a fairly minor, mundane one, in the grand scheme of things).

These opinions, while uninformed as is often the case, were interestingly much more split on the move than the usual pro-LinkedIn propaganda that’s somehow been passed off as “thought leadership” by some Omnicom subsidiary.

In fact, it was fairly negative, with recruiters’ responses to the news ranging from “This is the end of Connectifier as we know it,” to “Meh. Another one bites the dust” to “LinkedIn is the world’s most evil company and are hated by pretty much everyone” 

All of these, somehow, seem to be simultaneously true when it comes to LinkedIn at the moment, as this latest announcement evidences.

But let’s forget LinkedIn for a moment (probably impossible) and ask for a minute, what this news means for Connectifier, one of those rare tools that recruiters and sourcers actually like using and doesn’t totally suck when it comes to delivering actionable information on direct sourced candidates.

I’d call it the love and goodwill Connectifier somehow managed to achieve “unbridled passion,” but I’m sure there’s got to be at least one contrarian out there who hated it, this being recruiting and all.

But it was the closest to a lovefest that you’ll ever see in sourcing, to say the least.

Rapportive – Never Forget.

funny-pictures-never-forget-death-star-darth-vaderConnectifier wasn’t the first aggregation tool to sweep sourcers off their feet. One of the earliest offerings in this space was Rapportive – a tool which was often the first time recruiters had ever had a technology capable of displaying social networking and other PID results directly in your inbox – in this case, GMail, which somehow remains in beta long after products for it get bought and sold on the open market.

Rapportive was revolutionary and it quickly became indispensable, so of course LinkedIn snatched it up in 2012 for a cool $15 million, no small change for a product inherently a cut API away from doomsday.

Rapportive was small, backed by about a million bucks in VC cash and a very small team working with a very agile approach suddenly getting snatched up in a massive exit – and payday – for a product whose roadmap was headed the right direction, but still hadn’t gotten the destination down just right.

Fast forward a few years, and Rapportive is at best a fading memory for most of us – its features, however, live on as part of the LinkedIn platform, where they’re now just a small part of a huge solution offering most recruiters barely even knew still existed. Most of the cool bells and whistles were killed off somewhere along the way, leaving, well, a more unwieldy LinkedIn and a couple really rich, really lucky guys who figured out profile aggregation first.

Roadmap to Nowhere: RIP, Connectifier.

59223446Which makes you wonder what’s going to happen to the next generation of this sourcing software, where Connectifier was one of the most prominent products in a pretty niche market that’s now waiting with baited breath to see what, exactly, LinkedIn plans on doing with its latest purchase.

Along with Prophet by HiringSolved – less we forget that beloved tool – Connectifier became one of those products inextricably linked to most sourcers’ processes.

The reason these tools were so popular, of course, is that they let people get past the very expensive, very UI/UX unfriendly piece of product that is the LinkedIn Recruiter product and bypass the paid firewall to get contact information that they’d otherwise have to spend an arm, a leg and more than most companies spend on all HR Technology combined to obtain through an actual LinkedIn license. This information was already out there, after all, so it’s not like LinkedIn has a claim to any of this data – Connectifier just made pulling it all together much, much easier for recruiters.

Connectifier worked, and that fact alone helped it build a momentum that was no joke within the small circles of sourcing pros out there. The biggest names and most prominent pundits in the industry, people like Stacy Zapar, became outspoken evangelists and vocal (unpaid) advocates of a tool widely perceived as game changing (or just really damned helpful) by anyone using it for sourcing or recruiting.

With Connectifier, all you had to do was pull up a social page or personal profile, and boom, right there in the browser, like magic, candidate contact information would appear, the kinds of stuff like personal e-mails and home phones that are like gold for sourcers or anyone trying to contact a passive candidate directly.

While Connectifier wasn’t 100% accurate, nor was it able to pull up personal contact information 100% of the time, it sure felt close. The average was good enough where it could be trusted enough to send an e-mail or call a potential candidate without a second thought – and most of the time, that trust was reciprocated with some sort of success at finding the right information on the right candidates so the right person could reach out.

In short, it helped recruiters do their jobs better, and it worked while delivering as promised. That alone is pretty rare for a product in this space – and that reliability, inevitably, led to loyalty.

This, of course, is a big problem for LinkedIn, because the fact that they were viable made Connectifier a potential competitor, which, historically, LinkedIn generally tends to seek and destroy – by any means necessary.

Rapportive became a competitor, and subsequently got swallowed up and sold for parts. Problem solved, as far as LinkedIn is concerned.

It was inevitable, then, that Connectifier would see a similar fate, since these types of tools are the HR Tech Hunger Games as far as Mountain View is concerned.

They’re entertaining until they threaten to kill off the sacred cash cow that is InMail, which relies on this public data and lazy recruiters to rake in the Benjamins – a need products like Connectifier obviously threaten (and, more importantly, a major revenue stream for LinkedIn). Shit talks, VC walks, and somehow LinkedIn keeps on keeping on in spite of its diminishing returns and functionality that’s starting to fray up along the edges.

Without InMail, there is no LinkedIn – at least not at this point. This means, if you’re LinkedIn, any price they pay is more or less an insurance policy underwriting their entire existence and continued viability. And that, my friends, is always a hell of a deal.

Now, we don’t actually know the terms of the deal, leading to the widespread whispers that this “acquisition” was really just a lawsuit settlement in disguise, but for now, there’s no way of knowing any facts except when the dust settled, LinkedIn was the proud owner of one piece of software that recruiters really liked.

Time will tell, but given their track record, many in the recruiting and sourcing world are already coming to grips with the fact they just lost another of their most beloved tools to the evil, moustache twirling VC villains that are LinkedIn’s executives, spokespeople and biggest remaining “fans” (Second Life and MySpace have them still, too). Frankly, we might as well assume right now that Connectifier is another victim of the vagaries of unbridled capitalism and corporate litigation.

RIP, Connectifier. It’s been real.

We don’t know the terms of the deal, and whispers are widespread that the acquisition was a pseudo-settlement for a lawsuit that LinkedIn threatened Connectifier with. We’ll have to wait this one out and see how it shakes out, but needless to say many in the recruiting world are in fear of losing another tool to the giant.

Bear Market Blues: The Future M&A Impact for LinkedIn.

From to Cardmuch to Careerify to Slideshare, LinkedIn hasn’t had a particularly successful run at the M&A market – at least for the purported purposes of building a portfolio of complementary products and offerings into a more comprehensive offering with more robust capabilities and feature sets.

It’s probably not too soon to call their Pulse acquisition a dud (unless you really want your recruiting product served with a side of crappy content), and it’s not looking great for the staggering $1.5 billion the company dropped just last August for e-learning platform, acquisitions designed to create additional revenue streams instead of much needed reinvestment in what’s becoming a pretty outdated product.

One can only assume that LinkedIn got the Merrill band back together, because they’re building a product that’s pretty much the software version of a subprime mortgage – a bunch of junk assets bundled together and sold at a price that doesn’t reflect the fact that it’s about as good an investment opportunity as oil futures or multilevel marketing schemes.

This house of cards finally seems to be tumbling down, as Friday’s stock sell off suggested, but of course, the fact that a company that can’t turn a profit was ever valued at 40 billion in the first place makes about as much sense as a potential Trump presidency or your average HCM user guide.

The reason this terrible M&A track record hasn’t been previously punished by investors seems pretty simple – they’re not buying companies to add long term value and maximize shareholder profits. They’re essentially hedging their bets and business model.

The real reason LinkedIn seems to acquire companies in the first place, looking back at their deal history, is fairly obvious. With billions of VC dollars floating around in their collective war chest, they don’t need to actually beat the competition since they have the cash to just buy them outright just to eliminate them from the marketplace.

Make no mistake; the Connectifier acquisition represents one of these situations, another sacrificial lamb sent to the SaaS slaughter. The exception this time, as opposed to say, previous acquisitions like B2B marketing platform Bizo, is that their core constituency of talent and recruiting professionals (who represent 62% of their overall revenue) are actually paying attention this time around – and have a significant stake in the outcome of this deal, both in practical product terms as well as long term industry implications.

Death Wish: How LinkedIn Screwed Itself.

li chart

I truly believe that if LinkedIn holds true to form and does another hatchet job to a product like Connectifier, chopping it up for scraps and burying the few features they don’t kill off deep in the recesses of their labyrinthine stockpile of features and functions no one needs or uses, they’re going to likely finish expending the little good will they have left from their major revenue source.

The publicity surrounding this acquisition, furthermore, will likely make it difficult for them to pursue future targets or find a warm reception as a potential buyer, who are starting to figure out the game and likely to refuse to play by LinkedIn’s rule book.

That said, LinkedIn’s deep pockets and litigation hungry legal team may just resort to the same bullying and scare tactics that led to their out of court settlement with HiringSolved, one of the principal competitors of Connectifier and one whose willingness to fight LinkedIn rather than sell their company to save face ended in a resounding victory by settling while still remaining viable.

The fact that LinkedIn not only ostensibly lost this settlement – and attempt to shut down Hiring Solved – but also were forced to buy the competition, and therefore raising the viability and market share potential of the David who fought Goliath and won, represents a double whammy. It’s also a cautionary tale that by spurning the most hated company in talent (and SaaS) today, it can ultimately lead to more value for startups than a quick or convenient liquidity event. Fool me once, as they say.

I know what you’re thinking when you read this: capitalism will always win out, even if shareholders saw nearly half of their investment wiped out in a single day on the market precipitated largely by a single financial disclosure (and fact is, if they can’t meet targets now, this is likely as good as it’s going to get as they lose product innovation, competitive edge, reputation and goodwill across the board).

While this may indeed be a “market correction,” and the fact is that Reid Hoffman and Jeff Weiner and some VC partners are still going to wind up filthy rich no matter what, that even their institutional investors and most loyal customers seem to be turning on them is even more capitalistic than the “create, amp value, cash out, order mai tai” mentality by which Silicon Valley normally operates.

Capitalism always wins, yes – but where customers have the power of the pocketbook and there are manifold other options for recruitment technology investments, LinkedIn is unlikely to triumph over the competition, at least in the long term.

Once recruiter spend has been spent, then all they’ll have left are a set of products, like display ads and Lynda subscriptions, that no one is going to buy, and LinkedIn will have to sell off their acquisition portfolio for liquidity to compensate for their lost Talent Solutions revenue, likely at a steep loss considering the marked up prices they’ve paid for the few deals they’ve done where the purchase price (unlike Connectifier) was made public.

LinkedIn is a giant corporation, a massive Death Star still sitting comfortably atop the Silicon Valley and Wall Street food chains – at least, for now. But eventually, the fact that there’s nearly universal hatred from them in the talent acquisition space means that they’re increasingly opening the door for other companies to challenge and unseat them from the top of the talent tool hierarchy.

Back when they first launched in 2004, LinkedIn was the right product at the right time, a perfect storm of SaaS, social, social and search which filled a huge gap in the existing technology available to talent practitioners – demand which the product almost perfectly met.

That’s why they enjoyed such a rabidly loyal, dogmatic following among recruiters and sourcers for so long – it was a good product that worked better than anything else out there, and there were no real competitors in terms of market offerings.

This is no longer the case, and any loyalty from their now dozen years of existence has been completely killed off by their detachment, hubris and greed. The fact of the matter is that based off the response from their recruiting customers regarding the twin announcements of their Connectifier acquisition and subsequent stock sell off, their cash cow, big ticket customers seem to want LinkedIn to crash and burn. This is not a great sign for renewals, and an even more foreboding sign that their stock will only plummet further, even if it makes up some of its losses over the short term.

LinkedIn will never be what it was ever again, and that, my friends, is the reality of the situation. Sentimentally, it sucks, but pragmatically, it’s probably a good thing for an industry that had almost become too reliant on a single product and open the door for alternative platforms and smaller solutions which produce way better recruiting ROI than LinkedIn ever did. That won’t be hard to do.

While Connectifier is in a “wait and see” mode as to the future of this beloved product under its new corporate overlords, anyone who’s still hoping that it’s going to be a viable standalone offering that will deliver the same results at the same price point as before should stop holding their breath.

History does repeat itself, and if the killing off of Cardmunch, Rapportive, Connected and Bright are any indication, the requiem for Connectifier might as well begin now.

That’s the bad news. The good news is, it looks like while Connectifier is already as good as dead and buried, LinkedIn seems to be planning its own funeral, too.

I can’t wait to read the obit on that one, but let’s just say I’m pretty sure there aren’t going to be a whole lot of recruiters out there in mourning over the crumbling of the Evil Empire.

Connectifier, on the other hand – you will be missed. RIP, old friend.


unnamed (11)About the Author: Pete Radloff has 15 years of recruiting experience in both agency and corporate environments, and has worked with such companies as Comscore, exaqueo, National Public Radio and Living Social.

With experience and expertise in using technology and social media to enhance the candidate experience and promote strong employer brands, Pete also serves as lead consultant for exaqueo, a workforce consulting firm.

An active member of the Washington area recruiting community, Pete is currently a VP and sits on the Board of Directors of RecruitDC.

Follow Pete on Twitter @PJRadloff or connect with him on LinkedIn, or at his blog, RecruitingIn3D.

  • Marc

    Looking for an alternative to Connectifier? Try

  • Steve Levy

    Now we introduce responses from the entrepreneurs who believe their tool is the next big thing…

  • Jody Janelle

    Nice one Steve…

  • derdiver

    Great read as always.

  • Michael Wilson

    Good article as recruiting has to reexamine their LI relationship .

  • Great post! LinkedIn has long forgotten that its users (as in the people recruiters, sales, marketers etc need to be actively using the platform) are the product and LinkedIn’s greed has ruined what was once a useful professional networking tool. Facebook, with its 1.05 billion daily active users, knows where it’s bread is buttered and could teach LinkedIn a thing or two.

  • Mike Wolford

    No words… they should have sent a poet

  • maureensharib

    I’m not sure how many people really hate this company. In fact, I disagree with this premise – people will tolerate whatever LinkedIn dishes out so long as the companies they work for pay the LinkedInRecruiter seat bill. Employees just aren’t that engaged when it comes to cost savings on a “tool” they’ve been told is a “must have” by the LinkedIn “paid friends” and sourcing pundits in the industry.

    In fact, I’d almost argue they have a loyal, devoted, (addicted) following.

    Once it falls to the individual to pay – I’d bet that’s where the fit is hitting the shan and the sales are dropping.

    Because of reduced engagement on the site and company management waking up to the big news of what’s happened now with LinkedIn’s stock and taking a good hard look at the facts – even this sector is likely to follow non-renewal actions that others in the community are taking.

    Time will tell.

    We’ll see.

    • Pete Radloff

      Maureen, you’re right in certain aspects. If Company X is saying, you need to have this, and will pay for it, the vast majority will accept the nonsense that comes with their platform. But for others, I think the wheels are in motion to find other tools (IE Connectifier, and Prophet, etc) that can be used at a lesser cost, while still being effective. I think that budgets continue to be tight in the TA space, and people aren’t exactly sold anymore that the right talent is actually on LI – especially true in the tech sector. Hell, I rarely use an inMail, and use LI really only for some research purposes. Once I have 2-3 data points on a person, it’s just a matter of time until I find their contact info.

      But the shine of the inMail is gone, and they need to (from their perspective), eliminate any competition that may send the inMail the way of the Dodo.

      Thanks for reading and commenting. I Always value your opinion.

      • maureensharib

        I think there’s a very small subset of us that’s finely tuned into all of this and the rest of the world isn’t nearly so nuanced and doesn’t “get” the finer points of the discussion. I could be wrong.

    • Melanie Lynn

      Yes, people will tolerate whatever LinkedIn dishes out so long as the companies they work for pay the LinkedInRecruiter seat – yet I also work with many that are training teams to get around paying this fee. Think about it, what do you get for that LinkedInRecruiter seat? Haven’t you found ways to get around this and compared with and without?

      • Pete Radloff

        Absolutely, and there are numerous resources for getting around it via x-Ray searches etc.

        This is more about the bubble beginning to show signs of wear. And while we have been saying they are built on a house of cards (and fake profiles) for some time, it’s coming to fruition now.

      • maureensharib

        I never could understand why LinkedIn didn’t centralize training and allowed so many others to take it on and profit-center it. It speaks to an unsettling lack of knowledge around sourcing to me; a basic ignorance about nuance.

  • Kara Yarnot

    I’m with Maureen on this one, Pete. I disagree with your premise that the recruiting world hates LinkedIn. In fact, there is still much love for the company and their products. I consult to SMBs and Fortune 50 companies and they are still deriving value from their LinkedIn investments (and I’m often calculating the ROI myself). Many TA leaders (especially at the Enterprise level) worked for several years to convince their executives to increase their budgets to purchase LinkedIn Recruiter seats and other products. They aren’t about to back away from that spend anytime soon (especially when their recruiters view it as a “must have” tool – whether that is reality or not). Once they stop spending the money on the annual LinkedIn contract, it is likely gone from their budget and they have to convince leadership to take a “chance” on smaller, unknown solutions.

    I do agree with you, however, that LinkedIn is not truly in the business of connecting the world’s talent to opportunity (as they often state) or they wouldn’t dismantle the great features of the products they acquire (the Careerify acquisition last year is another example you did not include).

    When more companies like HiringSolved are capable of fighting LinkedIn, we may see the beginning of the demise, but I don’t think that will happen anytime soon. If I had a small tech start-up that LinkedIn wanted to buy to make me go away, I, like many mentioned above, would take the money and run.

    • Pete Radloff

      Agreed with you on many fronts Kara. But, most of the people who see it as a must have tool, in many cases, seem to see it as an only tool, and therein lies the issue from a user perspective. I think what may have been slightly lost in translation here is that not everyone hates LinkedIn – heck, i still use it every single day. But the people with the loudest voices in the recruiting world (who LinkedIn purportedly is in business to serve), have been ignored and mistreated. If LinkedIn did more to listen to their user base and biggest paying constituents, they may have more allies. Sadly they care more about the street than the early adopters of their technology.

      • derdiver


    • Kara: You are correct on many fronts, but the reality is LI is the shiny object right now. The nation of sheep working in corporate America are ALWAYS looking for a “tool” that will fix their problems. Problem is no tool will fix your problems without a process that works. LI is nothing more than a big, fat database. Most users aren’t professional recruiters; they’re 20 somethings that have no idea how to do anything more than find a name and spam it.

  • Stuart Jones

    Great post. Two years ago LinkedIn shifted its strategy towards increased customer engagement & satisfaction. If the sentiment described here is true, that strategy doesn’t appear to have been overly successful. Still, I suspect it’s a minority of the sourcing elite & super users who are the most vocal – and LinkedIn is going nowhere until there’s a viable alternative.

  • derdiver

    I have to find the irony rich that this little ditty has over 600 shares on LinkedIn. #truestory

  • carocc

    Given the behavior of LinkedIn towards its membership the more apt reason for their decline would be found by reading “The Scorpion and the Frog” fable. LinkedIn is the scorpion and the LinkedIn membership is the frog. LinkedIn has made a pile of money while riding on the back of LinkedIn members, and repeatedly LinkedIn has stung the LinkedIn membership while still expecting the LinkedIn membership to carry it to even greater riches.

    To make LinkedIn stock viable again LinkedIn management must make fundamental changes to the way it operates regarding its membership. For the past several years LinkedIn has thought it was in a competition to create the most “user-surly” social networking website on the planet, and, sadly, they would be winning such a competition should it exist.

    LinkedIn defies common convention regarding what a website most wants from their website, which is to say contrary to conventional wisdom LinkedIn seems more interested in building the most “user-surly” social networking website on the planet by means of restricting profile views, group participation and actual substantive content sharing in the form of a bonafide messaging system rather than the current “MESSaging System”.

    At every turn LinkedIn puts roadblocks in front of its members while every other website on the planet, especially social networking websites, do everything they can to get more eyeballs on their website for more minutes and page views each and every day.

    LinkedIn seems intent on making changes on the website where no change is really needed while ignoring things in actual need of fixing even when those things needing a fix have cost LinkedIn millions of dollars.

  • Amen brother! Great article

    • Pete Radloff

      Thanks Carol!

  • Pingback: The Rise and Fall of LinkedIn: A Recruiting Requiem. – TalentMovers()

  • Joel McLean

    LinkedIn offers up so much to hate in the way it monetizes its platform that we too often overlook the one reason why LinkedIn will continue to be indispensable: it transformed our resumes into permanent objects that we are more or less obligated, at this point, to make public.

    Connectifier, HiringSolved, etc. could never provide the value they do (or did) if LinkedIn didn’t exist. Without LinkedIn, they only serve a niche audience: tech recruiters.

  • Joel McLean

    Also, for anyone who prefers not to use inmail, I strongly recommend checking out Nice little plugin that gets most emails for you. Only caveat – it gets their work email.

  • Neil Elenzweig

    Great article, and timely for me. I was just playing with Connectifier today, having signed up and forgot about it. My recent customer service experience with LI for an unresolved technical issue with no resolution or response for over 3 weeks, resulted in me sending an inmail to a Global VP: “your profile came up on a search for ‘customer experience’, which from my perspective is mediocre, at best”. Yes I was contacted, and “escalated”, then silence.

    LI has made it clear that a significant source of their revenue will be generated by our industry. They have also made it clear that the quality of user experience for those driving the revenue is unimportant. They have fallen – or maybe escalated is more fitting- right into one of the core driving factors of ‘The Peter Principle’, the book that basically said that incompetence is inevitable. The author actually wrote:

    “Man must realize that improvement of the quality of experience is more important than the acquisition of useless artifacts and material possessions.”

    Enough said, Who wants to send someone over there a copy?

    • Pete Radloff

      We’re doing a bit more than that at the moment. Stay tuned, as we’re really driving the issue to the forefront with them.

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