Is Facebook About to Get LinkedIn Fired?

This will not look good on LinkedIn's (NYSE: LNKD  ) resume.

Shares of the corporate-minded social-networking website fell by more than 5% yesterday after The Wall Street Journal reported that Facebook (Nasdaq: FB  ) will launch a jobs board this summer.

LinkedIn bulls argue that this is old news. There are already plenty of Facebook apps that detail job listings, and any effort to aggregate the information is more evolutionary than revolutionary. However, there's also a good reason LinkedIn came under pressure yesterday.

Armed with more than 900 million active users, Facebook could become a threat to most online companies. Unlike LinkedIn, where only a sliver of its registered users frequent the site on a regular basis, more than half of Facebook's active users are on the site in any given day.

There's already a fair deal of real corporate networking taking place, and anyone who's been on the site long enough has probably seen more than a few friends or family members secure new jobs simply by communicating through status updates.

Facebook isn't trying to be LinkedIn, though. There are no recruiting fees collected or premium subscriptions to sell for enhanced access. Bears have to give LinkedIn some credit here. It didn't become a $10 billion company -- and, unlike Facebook, a recent IPO that's actually trading well above its initial prize -- by accident.

However, it's also naive to think that Facebook's move may hurt more traditional employment hubs including Monster Worldwide (NYSE: MWW  ) -- which slipped 3% yesterday -- but not LinkedIn. If Facebook does make improving the way its hundreds of millions of users ferret out potential job openings, no hiring hub will be safe. 

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The Motley Fool owns shares of LinkedIn and Facebook. Motley Fool newsletter services have recommended buying shares of LinkedIn. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has a disclosure policy.


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  • Report this Comment On July 10, 2012, at 11:24 PM, emferguson wrote:

    It isn't just that Facebook may horn in on Linked In's business. Linked In has a PE over 700. It's priced for perfection. Everything has to go perfectly to ever justify that valuation, and that's just breaking even. If things go less than perfectly ...

    Which apparently they aren't.

  • Report this Comment On July 12, 2012, at 8:45 AM, RebGem wrote:

    The big job searchers are out of college graduates. Most of these college graduates did exactly what you though they did in college and more than likely kept you updated on it on Facebook the last four years. Why in God's earth would they apply for a job with that profile?

    LinkedIn is separate. It's never good to mix work and play. I like LinkedIn to keep on keeping on as more college graduate try to search for job on a platform that they will feel comfortable with.

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