LinkedIn – The Ultimate Hyperlocal B2B Play?

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By now you’ve all read that LinkedIn just posted a smashing IPO. Shares doubled in the first day of trading. Founder and executive chairman Reid Hoffman is a rich (and justifiably so) man. Sometimes nice guys finish first in Silicon Valley. But wags continue to deride LinkedIn as a glorified recruiting tool. True, the majority of the company’s revenues come from recruiters or job seekers. That said, I will go out on a limb and posit that LinkedIn is actually a hyperlocal B2B juggernaut developing in slow motion. Here’s the logic.

Everyone who puts their profile into LinkedIn adds location information. Businesses that put their profiles in LinkedIn add a zip code and street address, in many cases. Those same businesses put in detailed information about what goods or services they provide, right down to the industry classification and descriptions amenable to key word searching. In fact, lots of people craft their LinkedIn pages specifically to gain decent search engine rankings because LinkedIn is a power recruiting tool. But all the pieces are also in place for LinkedIn to flip the switch and turn into a power hyperlocal advertising network.

I remember him pitching me on LinkedIn during the immediate post-Friendster era. His pitch rang hollow to me. Who got the last laugh? Reid.

First, LinkedIn holds specific information about where businesses are located and what they do. Second, LinkedIn knows which employees work at which businesses. Logically, this should make it drop-dead simple to sell locally targeted ads to businesses seeking to locate or influence nearby people who are searching or spending time on LinkedIn. What’s more, because this is a B2B crowd, LinkedIn could probably garner a decent premium for well targeted local ads. I personally used LinkedIn for hyperlocal searches for people. And if LinkedIn could do a good job targeting B2B ads at me, I’d likely pay more attention than on Facebook, where I’m all fun and no business. Vice versa on LinkedIn. Happy hunting, Reid!

Now, to drop the hammer – what few realize is that LinkedIn is slowly building out and expanding its own Facebook Connect-like network. By offering this universal authentication system, LinkedIn will not only be able to target ads to users on its own network but ultimately to target local ads to people on other content sites that have used LinkedIn as a sign-up/sign-in tool.

Right now, LinkedIn is a distant player in this space behind Facebook, Twitter and Google. But Reid Hoffman is nothing else if not patient. I remember him pitching me on LinkedIn during the immediate post-Friendster era. His pitch rang hollow to me. Who got the last laugh? Reid. So anyone who doubts that Hoffman can over time build LinkedIn’s site connect option into a powerful, popular feature is betting against the house.

Combine these three characteristics, mix in LinkedIn’s heavily business-centric crowd and content and you have the makings of the first hyperlocal B2B juggernaut. Congrats on the IPO, Reid. Can’t wait to see what’s next.

Alex Salkever’s Personal Fight column appears every Friday.