Reid Hoffman, chief executive of LinkedIn, is a fascinating Silicon Valley entrepreneur. As well as LinkedIn, he has joined the board of directors of PayPal and provided early capital as an angel investor to Facebook, Digg and Friendster. So who better to listen to for advice on social networking?
In a fascinating interview with the FT, he says there is a strong future to come for social network sites.
‘There is still a massive shift from offline to online, which will benefit them,’ he says.
We get people asking us at ItsOpen if social media, and Twitter in particular, are fads. The world is changing rapidly. The world of communications is fundamentally altering in our view and some companies are going to be at a serious disadvantage if they don’t recognise the new reality soon.
Like us, Hoffman is very positive about Twitter. Does he think it is worth the hype?
‘It will almost certainly make money. They have yet to do the business model part of their strategy. It is a classic consumer internet path which LinkedIn itself did in the first few years to get growth and traction first and then start working on monetisation.’
There are plenty of great companies and smart communications people out there - we are very fortunate to be working with some very progressive minded and supportive individuals within well-established companies - however there are still naturally some folks who do not accept the changes that social media is engendering.
In our view, traditional media is dying on its feet. Traditional newspapers are reeling as news is commoditised by the web. Advertising agencies are struggling because they are based on mass media models when the internet is based on niches and people using social media hate big display ads because they are so disruptive. Traditional PR agencies are clunky and are based on dealing with a small group of so-called experts when social media is empowering everyone to get involved and comment on market developments. This requires very different skills.
I went to a large PR agency in the City last week. I walked into the reception and it was plastered with coverage gained in traditional paper-based magazines. But that is not the audience that matters anymore. Everyone is migrating online fast. Some companies, I feel, are wasting their money investing in traditional PR at exorbitant rates. Traditional PR services do not work in a social media context. Spin is out. Social media users are tired of the spin doctors. They ignore them. Fresh voices and fresh thinking are required to win influence through social media.
Hoffman sees trouble for traditional agencies (and by direct association for companies who base their communications models on the ideas of traditionally-minded agencies).
Asked if there is a future for traditional media companies, Hoffman says:
‘I hope so. Traditional media companies have created a lot of interesting products. The challenge is obviously that there is a massive switch of attention to online. And, as yet, relatively few traditional media companies have created the right product solutions there. Now, whether they will create it, buy it or partner or whatever, I do think there’s going to be a very strong shift online and then traditional media companies are going to need to navigate that or it will be very painful.’
Read that again and remember Hoffman has had a big part to play in creating the future that is around us now. We wholly support what he is saying.
Read more of the fascinating interview here.