Facebook Inc (FB) Social Job App No Threat To LinkedIn: Piper Jaffray

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Facebook Inc (NASDAQ:FB) recently expressed that it would be launching a job application platform. The social networking giant announced yesterday the launch of the app, which implicitly sets it head-on-head with Linkedin Corporation’s (NYSE:LNKD) main business. In a report published Wednesday, Piper Jaffray analysts Mark J. Zgutowicz and John D. Crowther reiterated LinkedIn at Overweight with a price target of $150.

Facebook Inc (FB) Social Job App No Threat To LinkedIn: Piper Jaffray

The analysts wrote, “we are buyers of LinkedIn on weaknesses attributed to the public launch of a Facebook Social Job application, which will aggregate ~1.7M job openings from hiring and recruiting partners already operating on FB. We do not believe the announced app represents a new competitive threat to LinkedIn as individual, social job partners have been operating on FB for years, and news of a potential FB job board was prevalent in the media earlier this year. In our view, LinkedIn continues to hold several distinct advantages over FB in the professional networking market: namely the desire for individuals to separate professional and social live and access to a more desired employment base of “passive job-seekers. Reiterate Overweight, $150 PT”.

While this quote neither attacks nor supports Facebook’s new venture, there are a lot of question marks arising from it. I am not a proponent of Facebook Inc (NASDAQ:FB), but it would be premature to rule out the potential it has in this new area of business. The analysts estimate that Facebook already commands about 1.7 million job openings arising from the current registered user recruiters. This is nothing compared to LinkedIn Corporation (NYSE:LNKD) featured job openings. After all, it is the professional networking giant’s sole business.

However, looking at the scenario in terms of potential, it would be difficult to bet against Facebook’s ability to turn the tables. Recently, Facebook reported achieving the 1B monthly active users milestone. This can be a handsome catalyst towards eclipsing LinkedIn in the business of jobs listing. Facebook members will be able to share and apply for jobs through the joint social jobs app. The social media giant already has BranchOut, DirectEmployers, Work4Labs, Jobvite and Monster.com (through its BeKnown venture), as current partners in the business, which the analysts predict will be listing at least 1.7 million jobs.

Facebook Inc (NASDAQ:FB) has a better chance of increasing the number of partners once the app is launched as other recruiters will assess the viability based on the success of current partners. Moreover, Facebook could also go on to launch the app globally over time.

The analysts also wrote, “we note this is not the first foray for FB into the hiring and staffing market as many of the social job partners (i.e. BranchOut, BeKnown, etc.) have been operating within FB ecosystem for years. Each has attempted to replicate the professional networking and talent search capabilities of LinkedIn, with varying degrees of success. The new joint venture will look to increase the scale by combining efforts of these previously individual applications”.

Nonetheless, there is a downside to Facebook Inc (NASDAQ:FB)’s new venture. It is assumed that a majority of people prefer to separate their social life from their professional profiles. This is likely to affect Facebook’s prospects in the new venture; users are unlikely to disclose their professional profiles on the social jobs app platform. The analysts point to other social sites that have tried to blend the two networking needs, saying “Individual social job companies have been operating on FB for years, but have failed to gain meaningful traction”.

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