LinkedIn, The Next Expert Network?

New York—Social network LinkedIn is considering an expert network offering, competing with existing expert networks such as Gerson Lehrman Group and Vista Research. If LinkedIn decides to enter the market, it will be the twenty-sixth expert network in what is becoming a crowded field.

According to a recent article in eWEEK, LinkedIn is planning to launch an expert network service later this year, although details are still being worked through:

Sometime in the first half of 2008, LinkedIn will begin offering its primary research services to businesses for a subscription fee. [Product manager Mike] Gamson said the details have yet to be worked out. Experts successfully tapped by researchers will then get a cut of the money. Again, what that cut will be is uncertain.

It is not surprising that LinkedIn would consider entering the expert network market, especially since it is one of the tools that current expert networks use in sourcing experts. The trick is being able to charge for a capability that is already freely available to current users of LinkedIn. One approach is to add additional metrics about the available experts to assist investors in assessing the quality of the experts.

As outlined in Integrity Research’s recent ResearchFocus study, the expert network field is increasingly competitive, as the number of firms has exploded from a handful a few years ago to twenty-five today. Compliance procedures to protect against the dissemination of material non-public information through an expert network have increasingly become the norm in the industry, increasing the costs of entry. In addition, service levels have increased as clients expect the ability to speak with knowledgeable representatives who can facilitate consultations.

Nevertheless, LinkedIn brings the advantage of an existing 20 million person network. The largest expert network, Gerson Lehrman, has 180,000 experts. Granted, the majority of LinkedIn’s contacts are not experts from the perspective of institutional investors but even if only a fraction are interesting, LinkedIn can dwarf the existing expert networks.

LinkedIn’s platform for locating individuals and exchanging content is also of interest, particularly to hedge funds that either have, or are considering, bringing their expert sourcing in-house. A viable business model for LinkedIn would be to license versions of its platform to hedge funds for internal use.

Whatever its ultimate approach, LinkedIn represents a new form of competition in the expert network market–a technology firm which brings different strengths and a potentially disruptive business model. Stay tuned.

For the full eWEEK article, go to
http://www.eweek.com/c/a/Messaging-and-Collaboration/LinkedIn-Set-to-Become-Financial-Research-Broker/