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Is BranchOut a LinkedIn Killer?

Thursday, 14 Jun 2012 | 10:34 AM ET
Branch out
Source: Branchout.com
Branch out

LinkedIn’s security breach last week not only put the company's reputation on the line. It also may have paved the way for BranchOut, another professional networking company, to grab some of LinkedIn's users.

BranchOut, which launched in June 2010, is a career networking app within the Facebook ecosystem that aims to blur the line between personal and professional connections by allowing users to leverage their Facebook profile to create a professional profile.

“It took LinkedIn five years to reach 25 million users while it only took BranchOut a year and a half. You can grow fast when you have the ability to tap into that huge user base on Facebook,” said BranchOut’s Founder and CEO Rick Marini. "Unlike LinkedIn, BranchOut users do not have to start from scratch."

According to aJobvite surveyreleased in November, 10.2 million of Americans found jobs on LinkedIn while 18.4 million Americans found jobs on Facebook.

"That is a powerful statistic for BranchOut. The world is changing,” Marini said.

Over the past two years, BranchOut has attracted about 25 million registered users and is currently adding new users at a rate of three per second, Marini said.

Although Marini points to explosive growth numbers, the latest data posted byAppData, a website that tracks traffic for Facebook applications, shows that BranchOut peaked in the period of April 27-29 with a total 13.9 million monthly average users but has lost 10.4 million monthly average users in the last 30 days.

This coincides with a survey released by Reuters last week that found the 34 percent of Facebook users were spending less time on the site than six months ago.

Despite LinkedIn's own recent troubles, including the recent security breach that involved millions of users' passwords, the company said it does not view BranchOut as a threat in the job networking space.

“We know there are a number of these apps that have tried to leverage the Facebook platform for professional networking. It doesn’t appear that any of them have gotten a significant amount of traction," LinkedIn’s spokesman Hani Durzy said.

Marini said his company isn't trying to compete with LinkedIn. In fact, he said, he sees LinkedIn as a complementary business, not a direct competitor, and credits LinkedIn for BranchOut's revenue model.

Whereas LinkedIn focuses on the top 10 percent of the global workforce, BranchOut targets millennials and aims to focus outside of just white-collar jobs, Marini said.

BranchOut CEO 'Likes' Facebook
Rick Marini, BranchOut CEO and founder, discusses his efforts to take on LinkedIn and explains how Facebook is driving traffic to its apps and onto mobile devices.

“LinkedIn is enhancing the value of the pie. We are typically valued against LinkedIn, and if you are constantly compared to one company, you want that company to be worth a lot of money,” Marini said.

Similar to LinkedIn, BranchOut has a premium service for recruiters called Recruiter Connect. BranchOut charges recruiters $200 to $300 a month for the service.

Another source of revenue BranchOut has borrowed from LinkedIn is job posts, which the startup does on Facebook.

Unlike LinkedIn, however, Branchout has not yet ventured into advertising, but it's something the company plans to do, Marini said.

The company, which secured $49 million in venture funding and recently closed on a series C round raising $25 million, is still in growth mode and is not looking to be profitable in the short term, but is instead focused on user acquisition and retention, Marini said.

One area the company sees opportunity for growth is in mobile.

Mobile, which accounts for one-third of BranchOut’s overall traffic, is driven by international markets, which make up 50 percent of Branchout's total user base.

“Mobile is something we are thinking about more and more and we are focused on how we enhance that experience for our users," Marini said.

Correction: An earlier version of this story stated that BranchOut lost 1.9 million monthly active users in the last month.


email: tech@cnbc.com

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