Fighting for Customers, TheLadders Calls Out LinkedIn Over Privacy Issues

Last month, luxury careers website TheLadders.com made the decision to revoke its $100,000 salary minimum for job postings. In effect, it removed the site’s exclusivity and put it in direct competition with all major career websites and social networks.

Yet entry into such a saturated market is not a mere walk in the park—the lack of substantive differentiation between most career players makes industry superstardom very hard to attain. And with Monster, Career Builder and Craigslist holding the name value, Indeed’s aggregation tool appealing to users from the "Google era" and LinkedIn capitalizing on the move to social media, where is TheLadders.com going to truly make its mark?

The answer, at least as of right now, seems to be privacy. In a campaign to tout its commitment to keeping its user data safe and secure, TheLadders specifically calls out LinkedIn and its CEO Reid Hoffman for dismissing the privacy concerns it believes are of paramount importance to career-seeking customers.

Marc Cenedella, founder and CEO of TheLadders, opened the week with a controversial blog post(that also went out as an email to TheLadders users and got featured, in full, in at least one industry publication) about Hoffman’s public dismissal of privacy issues. Notably, he focuses on a speech Hoffman gave at the 2010 annual meeting of the World Economic Forum.

Hoffman’s comments:

All these concerns about privacy tend to be old people issues. If you actually look at most young people using Facebook, etc, they put their cell phones on their profile. Maybe a little less these days…The value of being connected and transparent is so high that the road bumps of privacy issues are much lower in actual experience than people’s fears.

Cenedella reacts as if Hoffman violated every Commandment while saying each of the Seven Dirty Words.

"Yep, I think it’s just as unbelievable as you do — the founder of LinkedIn, the largest social network for professional people in the world says ‘all these concerns about privacy tend to be old people issues,’" wrote Cenedella. "Are you even allowed to say something like that these days? And that’s how the founder of LinkedIn feels about your privacy?"

He added, "Those of us in the job industry have a special duty and responsibility to treat your privacy with care, because privacy issues are especially important in the job search. When the economy is bad, and your company might be looking to cut employees, and you’re trying to make your mortgage… privacy issues aren’t old people issues, they’re normal people issues."

Though Cenedella insists he was being soft on Hoffman by only focusing on the "old people" part of the quote (rather than the full context of the comment which "is actually worse, and even more offensive to customers and alarming to HR professionals"), one would not be off-base in calling Cenedella’s reaction overblown.

After all, Hoffman is not, seemingly, saying LinkedIn does not care about the privacy of its customers, just that the media and analyst outcry and concern over the concept of privacy is exaggerated and not a sufficient inhibitor to growth. To him, the actions of social media users suggest they will accept some of the privacy risks associated with transparent, public online interaction.

Approached from that angle, Cenedella, would still have reason to criticize LinkedIn and thus ammunition for his company’s value proposition.

In its July report on disappointment customer satisfaction with social networks (they averaged a weak 70/100 score), The ACSI identified "user concern about privacy" as continually "problematic." Customers (and not just "old" customers) do care about how social networks handle their privacy, so whether Hoffman’s LinkedIn is relatively laid back on privacy due to its own indifference or perceived indifference from customers, it is providing reason for Cenedella (either as the privacy police or as the CEO of a competitor) to lash out.

Sure enough, Cenedella plays directly into those specific concerns in a later rant within the blog. He criticizes LinkedIn for selling information, without customer permission, to recruiters and HR departments and wonders why LinkedIn still lacks some of the relevant clauses in its user agreement—"I mean, c’mon, if it was all on the up-and-up, they’d mention it to you when you sign up, or at least in the User Agreement or Privacy Policy, wouldn’t they?"

He also plays on economic fears (driving at the idea that no job is "safe" and thus cannot be needlessly risked) when bringing up LinkedIn’s "legal right to sell your job-hunting information to advertisers, show it in their advertisements, and leak it to your current colleagues or boss, if they want to."

Tying it back to TheLadders.com’s value proposition, Cenedella vows his company will respect privacy, prevent current employers from seeing employee resumes and refrain from selling information to advertisers.

By including a lengthy pitch for TheLadders.com, the nature of Cenedella’s rant becomes almost comically clear—to present his company as the career/recruiting destination for those who care about privacy. His stint as the disgruntled, mortified Internet customer in the first half of the blog seems insincere (or, at least, "convenient") by the time he rolls into full-on plug mode.

Though there are exceptions (amazing success stories and all), an important value driver for social networks comes from "who else is there." For many, the ability to contact all their friends (or all their celebrity crushes, all their prospective employers, etc) matters more than modest differentiation in the features of the network. As a dynamic network that appeals to those interested in communicating with friends, personal contacts and prospective employers and employees, LinkedIn has gained significant immovability within the market.

Saying, "Our interface and service is a bit better than LinkedIn" is probably not going to be enough to dethrone the popular social network, even specifically on the recruiting/jobs aspect. The same would apply to TheLadders.com’s head-to-head with sites like Career Builder and Monster. Job-seekers and employers want to be on the network most likely to have the right prospects—not the "coolest" one.

TheLadders evidently knows this, and in addition to touting its service as superior, it is also directly labeling an aspect of LinkedIn as hostile to customers. Customers do care about privacy, and TheLadders hopes that care will be enough to move the immovable object.

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