Why Does LinkedIn Need Connectifier?

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Last Friday, LinkedIn released its earnings statement and clearly the market didn’t like the message, as LinkedIn plunged 40 percent in early trading and erased $10B in market cap. We, however, are more interested in the announcement that LinkedIn is buying Connectifier, and to be more specific, why they are buying it.

Connectifier is sourcing software that was founded in 2012 by a team of ex-Googlers, and it has raised $12M in 3 rounds so far. It has built a social aggregator database of profiles so that recruiters can source candidates from various social networks, similar to TalentBin (acquired by Monster), Entelo, and us.

As these other services, Connectifier offers recruiters the ability to get potential candidates’ email addresses, with some suggesting they built their database by tapping the Gmail contacts of their early Chrome extension users.

While the acquisition of TalentBin by Monster makes perfect sense, it is completely unclear what LinkedIn’s need for Connectifier is. While Connectifier is a direct competitor to the premium LinkedIn Recruiter version, upon first glance, it seems rather strange. Let’s take a closer look at what the biggest assets of Connectifier are and what the reasons for this deal might be:

Database — Social Profiles

Unlike LinkedIn, the social aggregators (mentioned above) provide a larger and broader view of the candidates’ different social profiles. The most popular of these are GitHub and Stack Overflow for tech profiles, Dribble and Behance for designers and product people, and Quora for marketers.

LinkedIn Recruiter does not provide rich candidate information and while Connectifier certainly can provide significant value, in our view this is not something that LinkedIn needs help with. It can either encourage its 400M+ users to add links to their other social profiles or apply the same techniques used by the social aggregators to find and connect those profiles by themselves.

Contact Details

One of the big advantages of the social aggregators over LinkedIn Recruiter is their ability to provide recruiters with the contact details of candidates, mostly emails, but phone numbers as well. Again, we don’t see this as something that LinkedIn needs help with. LinkedIn has emails for all of its members and it is their own (strategic) decision to give priority to the user experience versus the recruiter’s’ needs and not provide those contact details but rather use the InMail approach for candidate engagement. So, in other words, LinkedIn can offer better contact details tomorrow morning if it wanted to, without needing to buy any third-party products.

Users – Business

Another possibility, which makes more sense, is connected to the business itself. But this assumes that LinkedIn is buying the customers of a potential competitor to enlarge its own customer base. Based on the most recent round of financing for Connectifier of $6M in October 2015, we can assume they have a few thousand paying customers. So taking on these customers and eliminating a competitor is a reason that makes more sense to us.

Killing It

Looking at the history of acquisitions by LinkedIn (and others), in many cases products are acquired and then changed in a manner that makes their old, loyal users unhappy. For example, Rapportive was a great plugin that replaced Gmail ads with useful information about your contacts. Unfortunately, LinkedIn didn’t take good care of it; as someone tweeted: “RIP @rapportive. Thanks @linkedIn for destroying another great product!”. Is Connectifier due a similar fate?

The Official Explanation

The following statement in the LinkedIn earnings announcement caught our eye:

“In 2016, … we will begin our journey towards addressing long-tail hiring by making Recruiter simpler to use, and introducing automated sourcing to help SMBs and hiring managers find and acquire talent. The acquisition of Connectifier, announced this afternoon, will further strengthen our core products and accelerate our product roadmap, leveraging powerful machine learning-based searching and matching technology to help recruiters and hiring managers find the perfect talent fit.”

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Bottom Line and Final Thoughts

Given the above, we tend to think that the official statement is the correct answer, since LinkedIn doesn’t need the database nor the contact details of candidates. They probably want to make an acqui-hire of a strong team with the purpose of attracting SMBs and want some help with matching and machine-learning tech to achieve it.

Pricing, however, might still be an issue for the SMBs, and so far, most sourcing products for this market are prohibitively expensive, ranging from $6,000 – $9,000 per seat per year.

Only time will tell if LinkedIn will be able to use the Connectifier technology and team to build and offer a cheap and affordable sourcing product.

  • avatarstar

    I don’t understand why LinkedIn would buy a company that supplies contact information on candidates.
    Because regardless of what companies LI buys, Many Tech candidates with Mobile and Digital skills
    are NOT going to allow LI to post their contact information. And if LI buys a company to provide this information then it will violate the option that LI provides for their members to be anonymous.
    Tech Recruiters have allot of complaints about all their changes and high prices for their services.
    They don’t bring the same value any longer without providing contact information. And we don’t
    need to rely on them any longer. We can search for the same candidates by using our own advanced
    Search Strings.

  • http://www.booleanblackbelt.com/ Glen Cathey

    I believe LinkedIn could have built in their own social aggregation solution directly into Recruiter and it would have been a fantastic value add. They have the technologists to easily make this happen, and by the sheer number of clones in this space, it’s not *that* difficult to do. Imagine being able to explore a person’s Twitter, Meetup, Stack Overflow, Github, etc., presence easily from within LinkedIn… If LinkedIn wanted to truly become *the* sourcing/recruiting platform, they have to become the “one stop shop” for human capital data.

    I think LinkedIn’s more restrictive InMail policy makes providing alternate contact vectors directly from within LinkedIn a serious value add. If the contact methods are accessible publicly, all LinkedIn would be doing is conveniently packaging up what sourcers and recruiters have to do manually today, or using a solution like Connectifier, or TalentBin, or Recruitment Edge, or Entelo…, and it would only be available to paying customers.

    What LinkedIn might really be interested in with regard to Connectifier is the advanced matching algorithms they’ve been working on behind the scenes – I’ve spoken with John Jersin several times and they’ve been working on some interesting angles to provide predictive insight into who is more likely to be the right match for a given role in a given company. I know to some that sounds far fetched, and I am as skeptical of algorithmic matching as anyone given what current solutions claim and what they actually deliver, but based on what John’s explained to me, the Connectifier team has been developing a predictive solution that is likely to create real value for companies that can leverage it.

  • http://HRTechAdvisor.com Ward Christman

    I think they just liked the name and plan to use it in next year’s super bowl to feature a commercial with buddy the elf saying it over and over again hypnotically…. might help their stock price!

  • http://www.recruiting-online.com/ Glenn Gutmacher

    The LinkedIn official statement is probably correct in terms of “introducing automated sourcing…powerful machine learning-based searching and matching technology”. They want the brains and IP behind all that, and sometimes it’s cheaper/faster to buy it than recruit it away. (LI’s past acquisition of Bright falls into this category.) Glen’s point about the predictive insight is consistent with this (far fetched or not). But your argument that “LinkedIn…can either encourage its 400M+ users to add links to their other social profiles or apply the same techniques used by the social aggregators to find and connect those profiles by themselves” doesn’t make sense. They haven’t encouraged their members to add social profiles very much, and the encouragement hasn’t worked well (have you seen how few people include their Twitter link or personal website link?), and we paying customers see no evidence of having deployed automated aggregation. But thanks for the well-written post — gives us things to ponder.

  • http://www.linkedin.com/in/seanrehder Sean Rehder

    What’s the over/under on Connectifier’s usefulness to recruiters in regards to getting email addresses?

    So…Rapportive..you need one’s email address to make it useful.

    Connectifier as of today…basically it gives you the email address (if they have it).

    My over/under date for Linkedin to take away the “email address give” is October 1st, 2016. I think they are going to move fast on this.

    Meaning..if you have the email address they will give you social media info..but only if you have the email address..like Rapportive.

    No more selling contact information after October 1…my prediction.

    @glenngutmacher:disqus … Why is your name “Ivan?”