How Will Facebook and LinkedIn Respond to the Rise of Local Networks Nextdoor and Alignable?
September 21, 2015 | Contributed by: Greg Sterling
This morning small business social network Alignable announced second round funding of $8 million. This brings the company’s total funding to $12 million. Alignable characterizes itself as the “fastest growing local business network.”
The company was launched in early 2014 and now says that it has a presence in “over 7,000 communities across all 50 states and Canada.” The idea is to connect local businesses with one another for mutual education, promotion and other opportunities. It’s not unlike LinkedIn in some respects but broader in its ambitions.
It’s “cousin” in the marketplace is the more established Nextdoor, which is more like Facebook for neighborhoods. The last time I spoke directly with Nextdoor CEO Nirav Tolia it was after its $60 million funding round in 2013. At the time the company was adding 75 to 100 neighborhoods a day and was in 24,000 neighborhoods across the country. Two years later the company says it’s in 75,000 neighborhoods.
For me Nextdoor has replaced Craigslist as a place to sell things. I’ve also noticed growth in membership and messaging volume, as well as the diversity of messages, in my own neighborhood on Nextdoor. More people in the past year are asking for and making local business recommendations. Nextdoor ‘s strategy is to get people deeply involved (daily usage frequency) before rolling out monetization scenarios.
Facebook is obviously focusing aggressively on SMBs and pitching itself as the only platform they need to market themselves. While that’s not true it’s a compelling pitch. However these newer networks, Nextdoor and Alignable, present Facebook and LinkedIn with interesting challenges and opportunities. While Nextdoor is not a Facebook replacement for consumers, it could eventually eat into some of Facebook’s use cases.
Facebook has generally responded to viable competitive threats by buying them: Instagram and WhatsApp. Will it try to buy Nextdoor? The company would probably want $1 billion to be acquired at this point. If Facebook were to buy Nextdoor it would likely allow it remain independent as it has with WhatsApp and Instagram (part of its portfolio strategy).
Facebook could serve relevant ads on Nextdoor, solving that headache for the site. However, CEO Nirav Tolia believes that Nextdoor has many and varied monetization opportunities. I wouldn’t be surprised if investors and founders were thinking the site could eventually go public. However I think that would be problematic over the long term.
Alignable could also be an eventual target for Facebook. But I’m thinking that LinkedIn is a better fit. However there you’ve got an integration question. Unlike Facebook LinkedIn has tried to incorporate acquisitions and broaden the utility and use cases for the site.
Putting aside the acquisition speculation, if Nextdoor and Alignable continue to gain momentum and grow, eventually the larger sites will have to deal with them one way or another.
What are your thoughts? What do you think will happen with Nextdoor and Alignable?