New LinkedIn deals – LexisNexis and Xobni – extend the reach of professional social networks

After the news of the deal between LinkedIn and New York Times I wrote about a couple of days ago, LinkedIn has just announced new deals with LexisNexis and Outlook plug-in Xobni.

The LexisNexis deal is particularly intriguing. Back in 2003 a number of corporate social networking applications were launched, notably Spoke, VisiblePath, and Contact Network Corporation. I knew all the players well, and Spoke was in fact the Gold Sponsor of the Living Networks Forum I ran in New York in December 2003. At the time there was one other significant player which was in a similar space, which was InterAction CRM software, owned by Interface. The CRM software was primarily sold to legal firms, where it had a strong presence. Its functionality included a “who knows whom” function, so that lawyers could find out who in their firm knew people at client or prospect firms. As with all the other corporate social networking applications, this included a high degree of user choice on what personal contact information was made available.

In December 2004 LexisNexis, the largest provider of legal information, acquired Interface, making InterAction CRM part of its suite of offerings. Since then LexisNexis has very actively acquired software companies, notably VisualFiles in case management, Juris in pratice management, and Axxia in backoffice legal solutions, repositioning itself far beyond being an information provider.

In what is apparently the first stage of moving towards “exceptional integration” between LexisNexis offerings and LinkedIn, LexisNexis’ legal services directory martindale.com is applying users’ LinkedIn network to provide information on who they know at particular law firms.

Given the current pace of announcements from LinkedIn, we can expect them to be highly visible by business users across the web. This swathe of announcements is starting to widen the gap between how LinkedIn and Facebook are being perceived and used. Certainly the demographics and uses of LinkedIn suggest it could become significantly more valuable than Facebook, if it indeed becomes entrenched into business applications. Last month’s fund-raising by LinkedIn valued the company at $1 billion, compared to a nominal valuation for Facebook of $15 billion (though anecdotally in off-market transactions closer to $5 billion).

More importantly, these kinds of steps are making professional social networking commonplace, beginning to bring in even some of the later adopters in the business world. There is immense value from effective professional social networking tools, and right now LinkedIn is definitely in the lead to take a large proportion of the value in this space. However leads can quickly erode. Facebook, by more aggressively segmenting its use into business and personal applications, could be a real contender, however this doesn’t seem to be its current strategic focus. This space will be extremely interesting to watch. We can expect that in a year or so from now that professional social networking applications will start to become true platforms for business interaction.

Disclosure: LexisNexis is a client from my work as a professional speaker. I spoke at a LexisNexis function in London for IT Directors of large law firms on the future of professional services and technology. In the lead-up to the event, LexisNexis UK Managing Director Josh Bottomley and I co-wrote an article on Strategy in a networked world for professional service firms.