They crave for the history of strong growth

Remember. It was the 1990s. Each policy, entrepreneurs, commentators, dressed in "" to celebrate the advent of the new economy. It organized international summits and the slightest allusion to the Net gave fumes stock, starting with the reactor core, the Nasdaq, the US electronic stock market of the values of growth. Participants in the e - G8 Summit, which is held since yesterday in Paris and brings together the cream of the digital economy, may have a thought moved to these time pioneers than most of the current stars, real estate or raw materials. The stock exchange was rare in nuggets authorizing of acrobatic somersaults, as in the blessed time to before the collapse of the dot-com bubble. They crave for the history of strong growth. Very thirsty. The first to have understood are the Kings of the Chinese Internet, who rushed to satiate the redundancy. As the search engine Baidu, valued more than 50 billion dollars.

But for the US, five new stars of the Internet, LinkedIn, Groupon, Zynga, Twitter, and Facebook, it is the smallest (except Twitter) who started the first. Behind, it dreams of 25 billion capitalization for Groupon and $ 70 billion for Facebook. But these "big four" prefer to wait wisely and consolidate their model by taking advantage of the tremendous development of the parallel market funds, banks and alternative spaces. They need less than before the stock market. Result, when LinkedIn is presented last Thursday, it was the rush of the thirsty dead who have expressed their frustration of not having access to these companies that still double their sales every year. A form of success by proxy.

But let's be fair, LinkedIn also much like the solidity of its model. Created in 2003, thus "post-bulle winter", by a very experienced entrepreneur, Reid Hoffman, the company has positioned itself to at the outset at the crossing of the wave of recruitment on the Internet and social networks. This choice of only professional clients has therefore always marked it its potential competitors such as Facebook or Myspace.

It has the disadvantage of limiting its market to a niche. Estimated the world market of social networks, in terms of advertising, more than 7 billion today in the general public, against less than 600 million on the niche of businesses. However, this allows the company to offer advertisers a choice target, the members of the Facebook network executives have an average annual salary of $ 110,000, and thus attract more high-end and income-generating advertisements. Finally, this bias enabled early LinkedIn to vary its sources of income. Unlike Myspace or Facebook which advertising represents almost all of their resources, it accounts for only 30 of the turnover of LinkedIn.

Half of the turnover of the company consists of the sale of a solution of recruiting for companies. The client can do a search on the network to find the rare Pearl. In a few clicks, find American Bankers of less than 35 speaking fluent Chinese. It is the activity which progresses more quickly. Revenues have tripled in one year. The third source, finally, are individual subscriptions to premium service. If admission to the site is free, individuals who pay are offered additional services to seek employment (Eve, statistics, etc.).

This profile is in theory less risky than its counterparts. Well took it. If he had chosen the public option, it would have under full front offensive Facebook, which is killing small firearms ex-gloire Myspace.

That said, the disconnection is not total since these three sources are related to a same base parameter, the size of the network. The evolution of the sales, doubling each year, is fully correlated with the increase in the number of its members, now the 100 million. And the miracle of the network effect is that it is exponential. It took five hundred days to reach the first million members when, in 2010, it was sufficient for ten days to add 1 million more. The firm is today very far before its two main competitors: the Viadeo (30 million members) French and German Xing (10 million). Analysts estimate that LinkedIn has more than 60 of the world market.

Without this army members, LinkedIn does not because much to specialists in recruitment on the Internet that are Monster or Careerbuilders employing thousands of employees and close to $ 1 billion in sales. Companies that have suffered so much from the recession.

LinkedIn is to reassure Wall Street about the strength of the new golden age of the Internet. It is partly the case, even if it is appropriate to recall that a company with 80 of the staff is under two years of House, which more than 50 of the members are visiting the site less than once a month (in other words are not active) and 80 of the turnover is still produced in the United States, is by definition fragile, especially in a market that is not extensible to infinity. In other words, to $ 9 billion were largely crossed the borders of the reasonable. If the bubble is not there, his spirit still haunts Wall Street.