The “professional” social network added another $22.7 million to its coffers recently by taking on more VC partners, but will it help?  Plans to launch a display advertising network look grim, and firings are happening more than hiring, so what’s next for LinkedIn?

Previous investor Bessemer Venture Partners, and new investors SAP, Goldman Sachs and McGraw-Hill have all added funds to the startup, which goes some way towards extending a previous round of $53 million in funding completed in June, according to the Inquirer.  With the latest infusion, LinkedIn claims its total valuation has hit the $1 billion mark.  Not bad considering it’s taken on more than $100 million in VC funding since its inception.

The company has admitted that it needed the latest infusion of cash to help it survive in this slow economy.  Its main source of revenue has been selling premium job postings, which is going down steadily as more people loose their jobs opposed to gaining them.  Last year, the company posted earnings of nearly $100 million due to its job posting business, but this year and beyond will be a much different story.

A large part of LinkedIn’s future was to monetize its growing traffic with advertising.  To do so, the company planned to launch its own ad-network of display and contextual advertising.  Since display marketing is sharply declining, the future looks even more grim for the company.  Given its latest funding, the company should spend it wisely to remain in business through the hard times it will inevitably face in the near future. 

LinkedIn is a great service, I’ve used it since the beginning.  It’s the one and only social network I use, and it’s been very beneficial to me over its short existence.  They need to think outside the box, and come up with a few creative ways to monetize its traffic beyond the traditional advertising and job-posting business models.  With so much funding, they definitely have some room to play with, and time to do it in, I just hope they can weather the upcoming economic storm. 

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Entry was posted on Thursday, October 23rd, 2008 at 10:58 am under Opinion, Social Media.

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