Facebook Will Take On LinkedIn For Professional Networking

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Jeff Chiu/APFacebook CEO Mark Zuckerberg
Facebook is creating a work-oriented offering to take on the likes of LinkedIn, Microsoft, Google and Salesforce.com, according to a report in the Financial Times (access requires a subscription). The new service will look much like the consumer version of Facebook, except users can keep their personal posting, pictures and identity separate from the professional and work content.

The new service would include online chatting with colleagues and the ability to connect with professional contacts. That could prove a serious challenge to LinkedIn (LNKD), which has successfully established itself as the leading business-oriented social network.

In addition, Facebook (FB) plans tools to share and store documents, according to the report. Those additions, along with communications among colleagues, take aim at products and services from Microsoft (MSFT), Google (GOOG), and Salesforce (CRM).

The new Facebook service is reportedly being tested at a number of companies before being rolled out at an unspecified date in the future. The company has a significant advantage in any competition: a claimed 1.35 billion users who are active monthly and 864 million who use it daily. In comparison, LinkedIn claims 332 million registered users in total, but only 90 million visited from July through September.

The focus on business networking and collaboration is an addition to Facebook's existing interest in reaching businesses and presenting itself as an advertising and marketing tool.

The breadth of Facebook adoption is its main competitive advantage because of what is commonly referred to as the network effect in business and economics. Much of the value comes from the availability of other people you might want to interact with.

But it also has some significant disadvantages. Many companies have banned employees from using the service at work because of fears that significant use can mean lost productivity. In addition, Facebook has faced privacy criticisms for years. Although consumers do little about their privacy concerns, according to the Pew Research Internet Project, businesses can't afford to remain unguarded. Information that leaked through employees could potentially land in the hands of competitors, causing damage to the business.

The question remains whether Facebook would charge companies or users, or if the new service would be paid for by advertising.

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