Facebook and LinkedIn, Article Review Example

The evolution of the internet services business at Facebook and LinkedIn are based on the development of social media which implies to computer mediated tools facilitating the creation, sharing as well as exchanging vital information, pictures, videos and ideas by users across networks and virtual communities.

LinkedIn

LinkedIn is one of the most popular sites of social networking that was specifically designed to serve the needs of the business community. The objectives of LinkedIn involve facilitating members in the establishment and documentation of networks involving people known as well as trusted in a professional sense (Caers & Castelyns, 2011).

Facebook

Facebook is a free website of social networking whose objective is to facilitate its members to create their profiles where they are enabled to send and receive messages, upload videos and photos and communicate with colleagues, members of their families as well as friends.

Social Networks

The social network service, SNS, involved an online community which facilitated creation of a profile by users hence creating personal network which incorporated other members of the same SNS. This was applicable in searching users having specific characteristics and offering invitations to other users to their network and communicating to fellow users. SNSes applied privacy controls for limiting access to the profile of their members but on condition of accepting invitations as a confirmation of existing relationship, then one could access the profile of a friend, connection or contact. Contacts were further categorized as first degree and second degree depending on relationship.

Professional Networks

The professional networking service, PNS, provided variation on the model of SNS. PNS was build on the basis of business and not personal relationship thus was responsible for creation of virtual platform to facilitate professional interaction. The difference between PSN and SNS is based on content, style of communication and nature of users.

Facebook is associated with immense user base with both business and personal application and thus the user interface permit SNS and PNS at the same time. The SNS applicable at Facebook gives it bigger user base that gives it a competitive edge in a PNS market. The cost associated with conversion of networks is significantly huge thus limiting the chances for SNS to permeate to PSN. LinkedIn has increased its membership significantly coupled with great improvements in user experience thus being able to dominate in PSN.

Source of revenue

The main source of revenue at Facebook is advertising that are commonly displayed side by side of user-provided content. This accounts for 85% of the total revenue for the firm with the other 15% derived through selling virtual products on Facebook platform by the third-party developers. Facebook worth was increased by $140 billion in 2012 through IPO (Rushe, 2012).The stock market valuation for the company was increased to $150 after effective advertising strategies was initiated (Caers & Castelyns, 2011).

Although the initial core service at LinkedIn involved internet-based networking for professional, the company later ventured in to income generating activities that include online advertising, recruiting, as well as research. Through these activities, the revenue of the company was projected to reach $100 million by 2008.

Potential issues at Facebook and Linkedin as they grow and evolve their platforms going forward

Just like many other businesses, Facebook and Linkedin face challenges associated with information security, data privacy and regulatory requirements. Data security breaches and theft of identities are common problems that both companies face.

References

Caers, R. & Castelyns, V., (2011). “LinkedIn and Facebook in Belgium: The Influences and Biases of Social Network Sites in Recruitment and Selection Procedures”. Social Science Computer Review, 29, 4, pp. 437-448

Rushe, D., (2012). “Facebook IPO sees Winklevoss twins heading for $300m fortune”. The Guardian (London). Archived from the original on October 15, 2013.