Business service providers recommended by existing contacts are given top billing, and eventually the company will let advertisers highlight their listings.
Social network LinkedIn has launched a networked search application aimed at helping users find local service providers, and at helping these providers acquire new customers.
LinkedIn Services provides a searchable directory of local business service providers who have created free profiles at LinkedIn's site. Once the directory and application have been perfected, the company expects to generate revenue by charging advertisers for premium services and exposure.
Besides the information provided by businesses, each listing displays recommendations that service provider has earned from other LinkedIn users. Results are sorted by rating and degree of separation between the recommendation writers from the user. The system is similar to ad-supported local search services being developed by Judy's Book and InsiderPages.
"Internet 1.0 was about creating efficiencies, but it's worked too well in some cases and created an overload of communication. Internet 2.0 is about putting friction back into the system to deal with the overload, both through technological and interpersonal approaches," said Konstantin Guericke, LinkedIn's VP marketing. "With LinkedIn, the referral becomes the filter. It puts human judgment back into the equation."
A recommendation by someone a user is directly linked to would appear at the top of the search results. Since anonymous recommendations are not allowed, users can evaluate the credibility of the source by viewing the professional profile of a user who recommends a particular service provider.
The service benefits advertisers by giving them a built-in tie to the user through a referral from an existing relationship. "It gives users one less reason to shop around, so it's more likely the service provider will get their business," Guericke said.
The new local directory is starting with 150 service providers who have signed up during the month-long testing phase. Initial categories include legal, financial, employment, creative, management consulting, technology, marketing, and architectural/construction services. Under those eight categories are 40 sub-categories, which will evolve with users' and providers' needs.
The most sought-after service providers on LinkedIn are corporate lawyers, accountants, financial planners, executive recruiters and user interface designers. Since professionals typically pay $1,000 to $100,000 per engagement for some of these services, the need for recommendations is often greater than with commodity items.
"When you're about to spend that much money, you want to get a recommendation from someone you know and trust," Guericke said.
The debut of the service follows the launch of its "referral-powered" employment classified ads network last month.
LinkedIn Jobs, which launched March 1, is a paid-listings service that highlights any social connections that a user has with the hiring company. The goal is to find a professional contact in the user's network that could introduce the user to the hiring manager or recruiter -- or to someone who knows these key contacts.
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Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.
Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.
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