Notchup, LinkedIn, and the Walled Garden Dilemma

NotchUp, a job site that pays you to interview with employers, recently went from darling to pariah in record time after it cluttered the Internet with thousands of invites. The offer itself was compelling enough: Invite others, and if they join we’ll give you a share of their revenues. Think AllAdvantage (in all its incarnations) meets job search.

NotchUp let users invite their LinkedIn contacts, which made it easy to indiscriminately invite a hundred friends at a time. Hoping for a slice of their friends’ interview blood money, they did just that — not by the hundreds, however, but by the thousands. Within a week, the upstart had the business-oriented networking site threatening legal action and reconsidering how users access LinkedIn.

Social sites like LinkedIn track relationships, and many of those relationships overlap because colleagues have many contacts in common. Each NotchUp user ran the risk of inviting a LinkedIn friend who had already been invited. As NotchUp’s user base grew, the number of already-invited LinkedIn users receiving redundant mails climbed rapidly.

What happened next tells us a lot about the challenge social search sites face when dealing with startups.

NotchUp didn’t design its application to stop redundant invites. The company needs to send multiple invites because only the person who finally convinces someone to enroll makes the commission. Within days of the launch, LinkedIn blocked the importing of contacts, citing a violation of its terms of service.

Initially, NotchUp criticized LinkedIn for doing so. “We have great respect for LinkedIn and are confident that LinkedIn will back up their public statements in regards to data portability,” Co-founder Rob Ellis told VentureBeat. They called the blockage a technical difficulty, and users were told the LinkedIn import feature would be fixed, responding:

“If your message is about the LinkedIn import profile/contacts features not working, please know that we are working on it and plan to release a new version soon.”

Shortly afterwards, LinkedIn spokesperson Kay Luo said the company was considering a cease-and-desist. Notchup subsequently removed any mention of LinkedIn from its site and capped the number of redundant invites at three.

Relationship saturation is characteristic of word-of-mouth viral marketing, where it’s known as a Bass Diffusion Curve. NotchUp should have recognized this and eliminated redundant contacts from the start, but that would have broken their business model; instead, they used it as a way to repeatedly invite the same person.

Social graph data is precious stuff, and sites like LinkedIn face a difficult choice. They can open up their relationship maps — as Facebook API or Google’s OpenSocial do — and risk losing their core value. Or they can turn their sites into walled gardens, keeping relationships to themselves but constantly fending off contact harvesters.

As the dust settles, NotchUp has attracted 900,000 subscribers in under three weeks. The cease-and-desist letter from LinkedIn will arrive far too late. With that kind of growth, others are sure to try and repeat the company’s misdeeds. And social sites will have to decide how they handle them.

  • Category: Web