Shares of LinkedIn Corp. LNKD +0.22% slipped more than 5% on Monday morning, apparently on some concern that Facebook FB +0.41% is preparing a move into the jobs-posting space that might spell more direct competition between the two social networks.
While Facebook dominates the social network market in terms of actual size, LinkedIn has managed to carve out a niche for itself as “the professional social network,” specializing in job listings, recruitment and other professional needs. And it’s worked, at least so far. LinkedIn managed to more than double both its revenue and earnings for the first quarter, and Wall Street is expecting another strong performance for the second quarter, with revenue currently expected to jump by 78% from the same period last year.
But, on Friday afternoon, FINS.com reported that Facebook was planning to launch a “job board” later this summer, where it will aggregate job postings from providers such as BranchOut, Jobvite and Work4 Labs. The story cited unnamed sources, and Facebook would not comment on the rumor. Like MarketWatch, FINS.com is owned by News Corp.
LinkedIn investors seem clearly concerned about growing competition between the two companies, and Facebook’s 3.5% rise on Monday morning suggests the market thinks it can take some share in this market. Doug Anmuth of J.P. Morgan wrote in a note on Monday that overlap between the two networks “is likely increasing,” and that Facebook has added several other new features over the last year to make it more useful for professional purposes.
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“Still, despite the importance of the social layer in the job search process, we believe many users will want to keep their social and professional profiles somewhat separate online,” Anmuth wrote. “We expect LinkedIn shares to be pressured in the near term by news of Facebook’s potential job board, but we do not view it as a material threat to LinkedIn and we would view any material weakness as a good buying opportunity.”