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Online networks become lifeline for job-seekers
(China Daily)
Updated: 2008-11-27 07:35 Janel Landon, who runs a small PR consultancy in Chicago, has long been aware of the potential of online networks: now in her mid-50s and facing a global recession, she's decided to sign up. "Given the state of the economy, I recently decided to jump on board," Landon said. "Professional networking is a 'must do' during unstable economic times." The economic crisis slamming firms across the globe has sparked a spike in usage of professional networks - Xing and LinkedIn are key sites - as people hedge against losing work and laid-off employees seek jobs.
US unemployment hit a new 14-year high in October and according to online job advertising firm Monster, recruitment activity on the Web plunged to its lowest level in nearly three years. Jobless rates are also rising in Europe. Traffic on the world's top professional Web networks has surged since the financial crisis started to make headlines, with top player, privately held LinkedIn, notching 25 percent more registrations in September than forecast. "Nobody has ever seen anything like this before," said Kevin Eyres, head of LinkedIn's operations in Europe. "Now we are growing by almost one new user each second." Membership on LinkedIn has jumped to more than 31 million from 18 million at the start of the year, growing fastest in the financial services, media, education and technology fields, Eyres said. The firm has not disclosed any financial details. "Given that a lot of professionals are currently losing or are worried about losing their job, it makes sense that career-focused social networks such as LinkedIn should see a boost in traffic," said Martin Olausson, director of the digital media strategies unit at research firm Strategy Analytics. He estimated the size of the online professional social networking market at about $170 million this year. Professional sites seek to distance themselves from social networks such as Facebook with their more sober approach, and by giving members more control over their profiles. Growth vs profit LinkedIn said it had seen a slight fall in job offers, but no sharp declines, whereas smaller peer, Europe-focused Xing, reported increasing traffic towards job adverts. But with the downturn hurting the recruitment business and advertising, social networks have struggled to find a balance between sharply rising usage and profitable growth. LinkedIn said last month it would cut 36 jobs - 10 percent of its staff. Both LinkedIn and Xing offer premium, paid-for services. Hamburg-based Xing, which has 6.5 million users in total and whose half a million premium users pay 5.95 euros ($7.75) per month for extra services, has also seen a jump in registrations and connections to record levels, and believes the crisis could open opportunities to grow through acquisition. "The crisis is very beneficial for us. We are debt-free, with over $50.5 million in cash, and the prices for competitors are dropping significantly," said Xing Chief Executive Lars Hinrichs. Xing, the first online community to offer its shares to the public, is expected to report 2008 sales rising 77 percent to $45.2 million, with profits rising even faster, according to a consensus of analysts provided by the company. "Anecdotal evidence suggests the macro slowdown might even boost subscriber growth and therefore Xing's core revenue source," HSBC analyst Dominik Klarmann said in a research note. Agencies |
