Networking Takes Giant Strides Online

As the job market heats up, interest in online business networking is starting to soar -- turning a one-time novelty into a necessity for millions of business professionals in search of jobs or business contacts.

The giant in the industry -- LinkedIn, of Palo Alto, Calif., which provides an online social-networking site for business professionals -- went live in 2003 and had 8,500 members by the end of that year. Today, it has more than 9 million, and much of the explosion in growth has occurred in the past year.

Individuals can join and get a basic account for free, but companies can pay for corporate accounts where they get extra benefits. Major companies pay from $10,000 to $250,000 a year to be able to contact all users directly and to post job offers. The company membership includes all 500 of the Fortune 500 companies. Fees for corporate users vary depending on how often companies use the site.

The rise in membership and use of the business site is transforming recruiting, says Mikolaj Jan Piskorski, an assistant professor of business administration at Harvard Business School who has studied the strategies behind such networking sites.

"LinkedIn has allowed people to display information about themselves without seeming like they're on the job market," Piskorski says. "It's really changed the nature of labor markets." He says that competitors have largely faltered or been unable to keep up with LinkedIn's membership growth. And other popular sites such as Friendster work as social-networking sites and are not specific to business professionals.

The business network is similar in concept to online social networks, except that LinkedIn and other such sites have a professional purpose and membership. Typically, users send out messages inviting colleagues to join the site for free. Users create profiles about themselves and compile connections they can tap for business-related reasons. Profiles might include educational background, memberships and work history.

LinkedIn represents more than 130 industries, while the community represents 3,200 public companies and 4,400 private businesses.

"It took so many years to build up critical mass, but now it's hit a tipping point," LinkedIn spokeswoman Kay Luo says. "We believe that someday, every professional is going to have a presence on the Web, and this way, you can control what's there."

Users say business-networking sites are increasingly becoming a legitimate work tool. EMC, an information management and storage company based in Hopkinton, Mass., has nearly 31,000 employees worldwide and uses LinkedIn routinely to recruit and connect with potential employees.

"[We] use it as a standard method of contacting passive candidates," says Barbara Massa, director of recruiting services at EMC. "We're seeing a much greater explosion in the use of this technology."