News Corp and LinkedIn – The Future of Social Networking, Advertising and the News

Implications: Great idea and about time. News and entertainment can no longer be found on paper, broadcast television, and broadcast radio. With the advent of broadband wireline and wireless services, you and I can get entertainment and news from just about any source. No matter what you may think about the various alternative news blogs or news channels they have proven to be effective in many cases. Today, the so-called mainstream media has been left to getting news feeds and video from “civilian journalists”. Entertainment programs not only buy photos and video of celebrities from the paparazzi but now also buy embarrassing videos and photos of celebrities from the civilian journalist. By the way we all know celebrity watching alone is a massive multi-million dollar industry. This acquisition makes sense.

Analysis:

If you were News Corp you would buy MySpace, which is what they have done, in order to access the mass retail market but also the professional/business market by acquiring LinkedIn. LinkedIn is expected to generate $100 million in revenue in 2008. I believe roughly close to 50% of LinkedIn’s annual revenue comes from annual subscription fees between $10,000 and $100,000; and that is from small to large size corporations.

It is amazing what you can find on LinkedIn. You can find corporations advertising for positions, professional blogs answering posted questions, and even corporations seeking advice. Further, that is just the free stuff. You pay a periodic fee and BAMMM!!! You get access to a huge network of professionals as far away as 20 degrees of separation.

This is a great site to see how folks are professionally and personally linked together. It is possible that News Corp will use this knowledge to target advertise and sell specific types of news and entertainment pieces. At the same time, News Corp could add this site to its online classified services. Whew!! Talk about an enhanced ability to advertise for jobs and connecting people to jobs.

This goes beyond hooking up or reuniting old colleagues or even creating new networks of professionals. If News Corp properly data mines this mountain of information from their traditional news services, MySpace, and LinkedIn, we will be looking at a massive database about millions of people. The demographic information embedded within the various databases is worth millions to advertisers. The content created by MySpace users is a source of information for advertisers. However, MySpace is also a valuable source of creative content. The MySpace content brings millions of eyeballs to the MySpace site; every day.

News Corp’s reflect the convergence of personal content, news, and personal information. How much is the data worth? How much is the access worth? This deal goes way beyond the traditional financial valuation based on revenue. This deal is about future worth. How much is this deal worth to News Corp? The answer is hundreds of millions of dollars.