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By Rip Empson

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Given how well LinkedIn (LNKD) has been doing of late, the headline for this post may seem a bit out of place. Just a few days ago, LinkedIn yet again exceeded Wall Street's expectations, posting strong third quarter results and increasing revenue for the sixth straight quarter. While its profits are fairly low compared to revenue, they, too, are growing steadily, and the company predicted another strong quarter to finish the year.

Nonetheless, while LinkedIn continues to assert its dominance in professional networking (and has started to become a strong, viable business in so doing), the company still faces plenty of competition that could upset its comfortable lead in the space. In spite of plenty of evidence to the contrary, there's a good chance that a "LinkedIn killer" could emerge, just not in the way you might imagine. Yes, it's hard to imagine someone beating LinkedIn head-to-head, but death by one-thousand cuts? Not out of the question. Today, there are a number of signs indicating that our most-valued professional networking is happening elsewhere, on a growing roster of sites not named LinkedIn.

How Has LinkedIn Gotten Here?

LinkedIn has surprised many of late by standing out as one of the most consistent performers among recent tech IPOs. There's no question the company has benefited from the frustrations and market doubt swirling around Facebook (FB), Zynga (ZNGA) and Groupon (GRPN) - to name a few. LinkedIn closed its third quarter with a member base of 187 million, and announced that 175K profiles are being created every day, along with the fact that it's now seeing significant increases in sales from premium subscriptions, which rose 74 percent to $49.6 million. To boot, much of its new growth is coming from international users.

With the struggle of its constituency (hey, even Apple (AAPL) had a sub par quarter by its own standard), LinkedIn is finally getting a little credit for what it's been able to accomplish. With early leadership and support from the PayPal mafia, people like Reid Hoffman and steady direction from long-time CEO Jeff Weiner, LinkedIn has managed to remain on course - and is somewhat of an anomaly in this regard for a social networking company.

The company has made a few smart acquisitions (namely, Rapportive), released a popular iPad app and has begun to focus more intently on its mobile strategy, along with a recent, significant makeover that shows it's not shying away from product innovation.

These big product changes (redesigned profile pages, update homepage, the ability to "follow," notifications, etc) are significant, but perhaps not for the reason you may think. For the casual LinkedIn user, it might look as if not much has really changed to the basic product over the last few years. But more hardcore LinkedIn users have been aware of big changes: For authors, the company's newsfeed and publishing tools brings the promise of reaching a business-savvy audience, and a big one at that, for example. But, really, the company has been focused on its primary revenue source - its solutions that target HR, talent scouts and employers.

By adding "endorsements" and update that goes beyond its long-standing "recommendations" tool, revamping company pages, and by rolling out tools that let brands get a better sense of (and improve) its reputation, LinkedIn has been making improvements to its bottom line.

The point is not to drone on about how great LinkedIn is, but this does give one a better sense of how LinkedIn has become a budding "Wall Street darling." However, while LinkedIn has seen its fair share of competitors without showing any signs of slowing down, it will have to continue to prove that it has value beyond being that place you keep your virtual resume and get spammed by marketers and recruiters.

The Threat

But this brings me back to the headline. Jon Bischke recently penned a Quora post that I've been meaning to write for some time now. While its hard to imagine anyone beating the company head-to-head over the next five years in the general professional networking sense, there's reason to believe LinkedIn is already having its standing threatened, it's just not as obvious because it's not coming from one single, obvious competitor.

Natasha's recent post on LinkedIn and our changing relationship with social networking begins to make the case from the user experience perspective. In the post, she notes that, for a long time, when accepting connections on LinkedIn, we've tended to keep our circles small. If you receive a request, you might only accept it if that person is a close professional connection. But, of late, with more and more users, that's changing. Over time, our connections have become diversified - some would say with negative consequence, i.e. more noise.

The truth is that those who get the most out of LinkedIn use the network as a means to connect with others in their particular line of work, particularly in those industries that haven't had strong, online alternatives for professional networking. In that way, LinkedIn becomes a useful way to share knowledge, say articles or research with a targeted audience, leveraging industry-specific discussion forums and beyond to better connect with those working in the same profession.

Focused Networking

But the truth is, as Bischke points out, that we're seeing a growing frequency of dedicated, focused professional networks, with activity on these network growing in kind. For software engineers, Github and StackOverflow are great examples. Sit in on a beginning collegiate computer science class today, and you'll likely find professors instructing their students to create a Github profile. Dedicated sites like these have way more value for developers in terms of being tools to network and for demonstrating what they know, and what they've built.

For designers, it may be Dribbble or Behance. It's also true for two spaces I pay attention to with some regularity: Education and health. For the latter, sites like QuantiaMD and Doximity have become a much bigger part of the conversation for the medical community. Not to overstate their importance, as it's still early, but Quantia, for example, recently announced that 25 percent of doctors in the U.S. have visited the platform in the last three months.

For those unfamiliar, these two companies are working to create an online (and mobile) platform on which verified doctors and physicians can share expert advice with the community, test their understanding by asking questions of experts, collaborating on diagnoses and treatments - along with staying informed of advances in treatment, technology, best practices, etc.

Now, some doctors may already be doing a bit of that via LinkedIn, but, writ large, given the choice, would you rather frequent a platform that is tailored to facilitating professional networking between not only you and fellow colleagues, but, creating an interface between you and the providers, payers and companies that dominate your industry?

These companies have already begun to follow LinkedIn's primary revenue model and create software that helps employers, recruiters - or in health's case, payers and providers - get targeted access to the people in their network. That means more education on the products and opportunities out there, both for current or future business. And for one's own employment.

In education, teachers still primarily connect with each other, share their knowledge (professional and otherwise) on social networks like Pinterest and Facebook. Pinterest, by the way, is extremely popular among teachers. But recently we've seen explosive growth in platforms that allow teachers to connect with each other, share lesson plans to save themselves time and increase their own effectiveness.

If, in turn, these sites allow teachers to make a buck (i.e. they establish marketplaces), they display the potential to be all the more effective and popular. ResearchGate is an example of the more academic, higher ed end of the spectrum, while the recently-launched Claco is going for the broader, all-encompassing approach. Edmodo and many other offer pieces of the teacher/student networking puzzle as well.

Higher Value

Part of the reason LinkedIn (and analysts) are optimistic about its financial forecasts was its recent hike in subscription revenue. Now, as many familiar with the LinkedIn experience know, the company has been trying to do its best to non-intrusively push users to become paying customers. It wants to monetize the broadest part of its user base. But one result of this has been to cut off our ability to view third-degree contacts, meaning you can't see full profiles beyond your second-degree connections unless you connect directly, or pay. That's why we've seen an increase in the number of random connection requests.

That's all well and good, and it's understandable why LinkedIn is doing this - I don't hold that against them. However, I've long used LinkedIn qua Google (GOOG) for people search, as a way to find people and as a way to view quick background info. So LinkedIn's monetization efforts have added some friction to that experience.

Again, the price point isn't particularly threatening, yet, as niche professional networks continue to grow, offering more robust and deeper ways to find out what people are up to, what they've accomplished, and present their resumes in a less archaic and industry-specific interface, I'd rather turn there - even for a fee - if it means I'm going to get more out of it. LinkedIn still has the advantage of the network effect and will for the foreseeable future, but if you're an investor or a startup looking to make connections with potential investors, business partners, it's starting to make less and less sense to use LinkedIn.

Instead, you might opt for AngelList, especially as it recently added a jobs resource. Sure, it's still young, but if you're in any way connected to healthtech, resources like the one offered by Startup Health seem to have a much higher value proposition for industry-focused professional networking.

This niche-ification could lead to more fragmentation, which would then bolster LinkedIn's opportunity to become the one place you display your Khan Academy badges, Doximity certification, Quora answers and Startup Health resume, but it could also represent a significant threat to LinkedIn's user base. The more engagement, activity and data they produce on their target user, the more valuable they become to users and businesses alike. And, if, down the road, these hubs decide to put up paywalls, you're not going to pay for all of them, so which would you choose?

Thanks to Jon Bischke for prompting this conversation. His Quora post here.

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Source: The Biggest Threat To LinkedIn: The Power Of Many, Not One