Companies that run social networks or similar services are fundamentally mediators of communication and information between people.
Mediators have to be trusted and provide value, or else people route around them.
That users distrust Facebook and LinkedIn will make their long term success much harder. (Twitter’s lack of trust may not matter as much due to the nature of its public-default service.)
Here’s an example. Recruiters will find me on LinkedIn then email me instead of using the LinkedIn system.
LinkedIn makes money from recruiters so the costs make their customers want to route around the system. Why bother using it? What value is there?
It also means LinkedIn is beholden to companies, not job seekers. Job seekers are the product being sold. If LinkedIn was truly a disruptive company (impossible now that it’s public) we could see its success through less friction in job changes, more transparency in salary, and probably larger wage growth for those that used it. If they provided so much value as an intermediary people wanted to use it and demanded to be listed there. Imagine if LinkedIn properly vetted every job listing and recruiters couldn’t even contact people who said it was below their target salary range. And there were actual repercussions to those companies for lying (banned.)
The thing is, when you can’t even keep passwords safe, who is going to trust you with really sensitive data like salary?
A social network without the trust of its users is basically MySpace. It’s just not that interesting.
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