A look at the business of social networking in the AP article: Networking site LinkedIn causes buzz — but can it be profitable?
[Reed] Hoffman [LinkedIn CEO] and LinkedIn co-founder Konstantin Guericke say they’re confident their 30-employee company will become profitable before 2006. How? By relying on a mixture of advertising and subscriptions sold to some of the site’s 1.2 million users.
They believe they can, while leaving the basic service open for free, charge “power users” such as executive recruiters, sales representatives and investment professionals who tap into the network frequently.