Features

How LinkedIn Blindsided the SEO Establishment

Written on
Aug 17, 2011 
Author
Byrne Hobart  |

DIGITAL DUE DILIGENCE – In AdWords, there’s a pretty simple rule: the winner is determined by the underlying economics, not by a superior AdWords strategy. In most parts of SEO, that’s true: if someone negotiates a better affiliate payout for the term “mortgage refinancing,” they can probably be the high bidder on a great domain name, and they can afford to pay more for great SEO talent.

Usually.

But there’s a twist: sometimes, the economics of accumulating links will swamp the economics of monetizing them. This shows up in a weak form in plenty of affiliate-dominated verticals: AdWords ads point to a product page, but organic results point to a review that then pushes the searcher to a product page.

There’s one vertical where this model used to work quite well, but broke down in the late 2000s: searches for people’s names. A few years ago, nearly any name search would lead to an affiliate page promoting one of these services:

  • Background checks.
  • Family tree information.

Now, a search for most names will yield a different mix:

  • A smattering of high-tier social networks (likely Facebook and Twitter).
  • A paid social network like MyLife.
  • LinkedIn, which will often be #1.

What happened?

LinkedIn is not a natural top result, in the sense that it monetizes far worse than background checks or family trees. But it’s a natural top search result in the sense that LinkedIn has relentlessly focused on SEO for names.

Their entire site architecture is focused on passing link equity from the homepage to as many profiles as possible, and their homepage naturally accumulates links (LinkedIn is a newsworthy topic). Moreover, their embeddable widgets create targeted links pointing directly to an individual user’s profile page. And the most common place to embed one of those links is on a domain that the user controls—which will be authoritative on the topic of that person’s name.

Essentially, LinkedIn has learned to arbitrage vanity in order to replace high-monetization clicks with high-interest clicks. The revenue is a fraction of what their older competitors would get; things look better from a lifetime value perspective, but probably not by much.

The paid social networks are an interesting exception. They monetize well, but aren’t especially linkable. The answer here may be advertising: MyLife runs banners and TV ads, cranking up their name recognition and thus their click-through rate. The margins are tighter and the revenue is front-loaded compared to LinkedIn, but in a sense it’s a similar strategy: their are linkable enough and clickable enough to get by without monetizing quite as well.

Could LinkedIn’s and MyLife’s competitors implement these strategies? It’s unlikely: LinkedIn has accumulated a massive head start, and the value proposition for embedding a link to a generic social profile is weaker than the value prop for embedding a link to a professional profile.

MyLife is in a weaker position, but there’s a paradox here: their strategy requires more care, investment, and fine-tuning to run profitably. A competitor would have to take bigger risks with more capital, just for a chance to be even. As with Groupon, doing a land-grab and then making the business worse can be a good way to build a competitive moat.

Cross published at the Digital Due Diligence blog. Sign up for the Digital Due Diligence newsletter here.





Byrne Hobart is cofounder of Digital Due Diligence, as well as director of editorial SEO for Yahoo!. The views expressed in his bylines are his own and do not necessarily represent Yahoo!'s opinions. Previously Hobart served as director of marketing strategy at Blue Fountain Media, where he focused on search engine optimization and pay-per-click strategies. He has been cited by The New York Times, The National Review, The New York Observer, Radio Free Europe, Voice of Russia, and TechCrunch, and has been published in Business Insider. He spoke at Search Marketing Expo West in March of 2011 on “The Economics of Content Farms.”

Reader Comments.

Great analysis. I think about these stratgies all the time since I can’t afford Ad Words. I can see how focusing on only one element really made LinkedIn a star and captured for them an important aspect of organic search.

Posted by Susan Silver | 1:59 am on August 18, 2011.

My opinion is that the IDEA COUNTS!

Posted by WebRoads Directory | 9:32 am on August 18, 2011.

Interesting theory that needs to consider two other points:

1) Not everything is about money.

2) Many entities are controlled by the global elite who also control the media and much of what we see on the Internet. (I refer to them all collectively as ‘The Borg’.) They can favor whomever they will and there is nothing anyone is going to do about that.

Posted by Gail Gardner | 3:35 pm on August 18, 2011.

What is seo? Search Engine Optimization Tips. SEO Tips and techniques, Google Optimization, SEO for Beginners. Its easy to rank your site. How Google Calculate Page Rank. World’s best site on seo tips and techniques.

Posted by search engine optimization tips and techniques | 5:25 am on August 19, 2011.

This article is especially true with B2B Companies. At some line in the sand, people have to consider that perhaps Linkedin is more feasable that perhaps an SEO Campaign.

Posted by SEO Company Daytona Beach | 8:21 am on May 22, 2013.

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