• Economist, Friday, September 26, 2008 12 PM

Few firms benefit with the financial markets in a tailspin, but the Economist points out that professional social networks are actually benefiting from the upheaval. LinkedIn, the market leader with 29 million members, has seen record traffic and growth in the last few weeks, as users update their profiles in case they lose their jobs. Xing, a popular professional social network based in Germany, is seeing similar increases.

Both LinkedIn and Xing are profitable enterprises. Their sites cater to the young business professional crowd and allow people to connect, keep track of each other, find jobs, build their business or simply create their own groups around common interests.

At a time when the overall economy was starting to decline, LinkedIn secured $53 million in venture capital funding that gave the site a valuation of over $1 billion. Whereas headhunters and companies provide LinkedIn with a big chunk of its estimated $100 million annual haul, Xing relies mostly on subscription revenue. The strategy is working too, as Xing pulled in an estimated $24 million in revenue in the first half of the year with a profit margin of 37%. Xing is also more global than LinkedIn, having expanded to 16 different languages, including Mandarin.

Read the whole story at Economist »