

Can LinkedIn predict when companies are in trouble? - muratmutlu
http://www.mobileinc.co.uk/2010/11/if-facebook-knows-when-people-break-up-and-google-can-predict-flu-does-linkedin-know-when-companies-are-in-trouble/

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gacba
If you watch your LinkedIn profile, you can tell two things, based on my
observations:

People only update their profile on LinkedIn when they are looking for a new
job, or just lost a job (for the most part). Some keep tweaking it all the
time, but you can spot the ones who never have activity and then suddenly have
7 updates...you know something's cooking there.

You can spot general trends about economic activity, assuming your friends are
geospatially similar. If, suddenly, you get spikes in activity where none
existed a month ago, you can assume that the job market in your area is
getting very turbulent. You can decide whether it's positive or negative based
on what you see ("Hey I got a new job", or just plain profile updates while
someone is looking...)

Very interesting.

~~~
biot
A guy at work has a 100% prediction rate for when people are about to
(voluntarily) leave the company. And it's as simple as "this person never
updates their profile, and the last few weeks they're updating everything in
it".

It'd be interesting to find out if someone has used this as a negotiation
tactic. It would likely only work if you're recognized as a rockstar employee,
but a few weeks before you talk to your boss to negotiate a salary increase,
be sure to routinely update your LinkedIn profile. At the very least, if your
boss gets LinkedIn updates it'll make them think twice before using the
"He/she wouldn't quit if I don't give them a raise" line of justification for
denying a raise.

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ig1
Already being done. There are dozens of firms out there which specialize in
this kind of analysis (data mining sites like linkedin, amazon, twitter,
google insight etc. for trading purposes).

~~~
dsplittgerber
Please elaborate, this sounds extremely interesting. Which firms are doing
that with which data and what are the results one can get from that?

~~~
ig1
Generally prop trading firms but also sector analysts at major investment
banks. How they use this data is mostly considered propriety, but you can
figure out the obvious uses.

Using Google Insights and Amazon is actually immensely valuable is this space,
as you can use product rankings/searches to figure out how products are doing
well before any official announcements.

For the social media stuff a lot of financial firms use third-party
technology. There's a whole load of firms that do sentiment analysis on social
networks. Most of the companies in this space build products for marketing/PR
teams, but sector analysts in consumer markets often use them as well.

Ironically the best way to track down the firms doing this stuff is to search
Linkedin for people with data mining expertise working in the financial sector
:-)

~~~
dsplittgerber
Thanks for sharing your insights! Mind another question?

How useful is that data really? I see the point in Amazon revenue #s of
specific products etc, but "sentiment analysis".. really? Can one actually get
actionable data from mining social networks like Twitter for sentiments? This
reminds me of "long on sunny/short on rainy days"-trading patterns.

~~~
pierrefar
Earlier this year I was at a conference where the keynote talked about
"sentiment analysis" of social media. Using real tweets as examples he went on
to debunk the current techniques as useless, really, because they can't
understand the sentiment. The current techniques he knew of and shared were
all keyword based. The OP mentioned the problems with this kind of analysis,
and I agree too.

Edit: typo.

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MortenK
Definitely interesting. As other commenters have mentioned, a spike in status
and experience updates definitely often signifies something is going down.
Another one is recommendations. When one person suddenly is getting 2-3
recommendations from colleagues, they are usually on their way out. If a lot
of people from the same company is getting recommendations left and right from
each other, the company is either going down or there is serious downsizing
imminent. Very interesting side effect of sites like LinkedIn.

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elblanco
I'd have a hard time relying on the data. Even in my own personal linkedin
contacts, it's full of out-of-date data. Most people seem to be a bit lazy
with keeping their profiles up-to-date.

~~~
muratmutlu
I think it's more about how LinkedIn users are reactive to possible changes in
workplace rather than general housekeeping. Just like most people only update
their CV when they are looking for a new job.

When we started to hear rumours of layoffs at Nokia, my activity feed was
buzzing with 'xxxx updated experience/profile/education' etc.

Interesting topic

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d4nt
It's all speculation of course, but I suspect they could probably create a
"disruption index" for every company based on sudden changes in turnover or
profile activity.

What I find interesting is, if they ever did try and do that, how might the
financial authorities respond. That data could be worth millions if used to
trade shares in those companies. Would it be considered insider trading? I
suspect LinkedIn would be put under pressure to publish the index to avoid
getting into trouble.

~~~
aaronblohowiak
probably not: look at how slow / weak the fed has been to react to more
blatant forms of insider trading that are already in play

~~~
dsplittgerber
I think you mean the SEC and/or the "feds" (FBI), not the federal reserve
bank?

The problem with insider trading is that a verdict hinges on proving intent to
defraud, which is very difficult to ascertain.

Also, IMHO, insider trading is mostly used as an easy way to generate
publicity and give the general public the fuzzy feeling that "something is
being done", whilst achieving rarely something of value for the markets and
society. There are many things much more worth of pursuing with limited
resources than insider trading. Alas, that's what you get when you staff an
oversight agency like the SEC with lots of lawyers.

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middlegeek
This is exactly why about 4 months ago I changed my settings so none of my
connections are notified when I edit my details.

