As I wrote in Facebook bursts the bubble earlier this week, all the social media/gaming stocks have been hammered by the Facebook debacle. Zynga and Groupon hit particularly badly losing 50% or more from their highs. Linkedin, however, was less affected – losing only 15% since the Facebook IPO.
Linkedin is at the serious, business end of social networking. Basically a big jobs board. So the data breach whereby 6.5m user passwords were posted on the internet seems an even more serious breach of confidence as enterprise strength sites should know better. It’s quite easy to find out if you are one of them. Anyway, Linkedin will have told you by now and your leaked password will not be valid anymore. Although I am not one of them, I will admit to this being a big wakeup call to me not to use the same password on multiple accounts. I reckon I use nearly 100 sites where a password is required – everything from FT.com to my British Gas account to my doctor’s surgery to my bank and savings accounts. Quite how I can practically use a completely different password for each of them is beyond me! But I’m sure someone will tell me how.
Linkedin shares have hardly moved as the news of the hack has filtered out. Indeed they are up about 3% in the last few days. At $94 that's still around twice their $45 IPO price in May 11. But Linkedin has a good business model and makes money. People will always want to advertise their CVs and recruitment companies will always want to have access to this rich data source. Linkedin has changed the recruitment business model in much the same way as Rightmove (another site we rate) has changed life for ever for estate agents. These companies will survive and probably prosper. Which is rather more than we are prepared to say for Groupon, Zynga (only as good as the latest game fad) and possibly even Facebook.