Own the data and be indispensible

Social media sites come and go.  Facebook controls the consumer space at the moment but social users are fickle as MySpace and Friendster found to their cost.  However, business sites are a bit different.  Business users are more conservative about investing time and effort in social media as time is precious and nobody wants to risk their professional reputation on a fly-by-night service.  This is where LinkedIn has steadily built a business by being THE site for professionals to maintain an online presence.  I wrote about this last year and although it's anyone's guess whether LinkedIn is worth its current market value of $10 billion, the company certainly seems to be the only game in town for online social business networking.  Despite a hiccup in June the share price has bounced back and is now 16% above its flotation price.  Pandora or the Dow Jones index have not fared so well.  

Pandora is not short of competitors such as Spotify and Last.fm and relies on paid-for content from the music industry.  LinkedIn, as with other social networks, gets its data from its users who have an interest in contributing this for free and keeping it up-to-date.  It's hard to see how a competitor could come in and take that away in the short term but I suppose Salesforce.com and its Jigsaw acquisition could be a threat.