It has long been known that hovering over LinkedIn's (LNKD) head lies a sword of Damocles. What does this sword consist of? It is Facebook's (FB) entrance into the professional networking area as well as the job posting segment.
Today, yet again, we get rumors that Facebook might do it. It might enter the job listings market. For now it still doesn't look to be a full court press into the segment. Talk is that Facebook will aggregate existing job postings from external sources.
But little by little, Facebook will come to the realization that, in its quest for monetization, job listings are a no-brainer. Facebook will have the employers and employees in its network. It will have the connections between employers and employees. It's thus a natural source both for employees seeking employers, and vice-versa. And, since Facebook is already inching towards chronicling its members' lives, what would be more natural than to include their work experience, their curriculum vitaes?
Anyone who frequents LinkedIn and Facebook already knows that the user commitment to both sites is wildly different. Facebook has a much more powerful grasp over its users, much greater time commitment. In a word, once Facebook enters the professional market seriously, LinkedIn's very existence will be threatened.
And, knowing this, LinkedIn hardly seems a stock worth the incredible premium it trades at (forward 2012 P/E is 154), in spite of its (current) fast growth, illustrated by its revenues growing 100% year-on-year.
It seems likely that today's news will have a more lasting impact, as Facebook will undoubtedly encroach on LinkedIn's business little by little. It might not be enough to seriously slow down LinkedIn right now, but might well threaten LinkedIn's very existence down the road.