LinkedIn is a fascinating company. It’s a pretty ugly looking social network, but one that has actually figured out a way to monetize its user base. They have been profitable since 2006, and recently recently raised about $75 million at a $1 billion valuation. And what’s most interesting is that they’ve done all this in ways that Facebook and MySpace seemingly can’t: premium memberships, and high CPM rates.

The reason LinkedIn has been successful with this approach? Simple: their users feel they are getting a return on their investment.

Unlike Facebook and MySpace, which are used almost entirely for entertainment and social purposes, LinkedIn is a business networking platform. Users make contacts, get recommendations, and even find jobs. With everything on the web moving toward free, people are still obviously willing to pay a fee if it will help them advance their professional careers.

The paywall also creates a tremendous environment for advertisers, since the site’s heaviest users are generally professionals looking for ways to move up in the world. This means that a) the average LinkedIn user will be more well-to-do than the average Facebook or MySpace user, and b) the average LinkedIn user will be infinitely more likely to click on an ad for a product that helps them along the same lines.

What does this say about the notion that everything will soon be free? Well, most software and digital media will be free, but a product with a direct ROI to the end user may always warrant a premium.

Keep in mind that LinkedIn has done all this with a pretty poor design, and a less-than-intuitive interface. This is a business with a lot of room for growth, and a clear business model that should be sustainable for a good bit of time. The question is: will they be able to take online business networking mainstream, and win in this space long-term?

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On Friday, Oprah emphatically endorsed Amazon’s Kindle on her show. It’s a pretty interesting move since Oprah’s audience isn’t full of typical technology early adopters. While her endorsement is unlikely to make the Kindle a mainstream hit overnight, it may be a sign that women are a critical demographic for the device.

As is, the Kindle costs $359, which is an enormous barrier for most consumers. For men the Kindle also represents an additional item to carry, one that doesn’t fit nicely into a pocket. So while the Kindle certainly offers a better reading experience than the iPhone’s Stanza app, the monetary and physical costs represent significant barriers to adoption amongst men.

For women, however, the Kindle’s cost/benefit ratio is far more favorable. To begin with, a purse is a much more convenient place to carry a Kindle than a pocket or even a briefcase. My girlfriend usually carries everything from a book and an iPhone, to a pair of shoes, in her purse. Fitting a 10 ounce Kindle in wouldn’t take much extra effort.

Furthermore while (an increasing) many women have smart phones, far fewer of them have them then men. This alone means that women as a demographic are more likely to compare the Kindle to the alternative of paperback books, rather than their Stanza enabled smart phone.

Still, women aren’t immune to the Kindle’s high price (which is $50 off under Oprah’s special). However, if Amazon can bring the price of the Kindle down over time, women may be key to driving long-term adoption.

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Yesterday Shawn wrote that Facebook’s redesign may cause many apps to die, but the ones that survive, will be far more useful. The question is, whether this is symbolic of a larger and more fundamental change in Facebook’s strategy. Could Facebook be moving away from its roots as a time-killing distraction, in favor of becoming a powerful tool for productivity and real entertainment?

Facebook’s focus on the news feed might be one key example of this shift. Stealing a page from Twitter and FriendFeed, Facebook has quickly become the dominant player in life streaming. While not a single friend of mine outside of the tech world would be able to tell you what Twitter is, a good majority of them now post regular status updates on Facebook. This, along with the new commenting capabilities they’ve added, has made lifestreaming an increasingly mainstream activity.

Facebook has also become an extremely popular instant messaging platform. Facebook IM is still a bit raw compared to some other clients, but it has one major advantage: more of your friends may be on Facebook, at this point, than on AIM.

This is really just the beginning of what’s possible, though. Facebook’s start-menu-like application bar is no doubt an indication that the company sees itself as web operating system. A couple weeks ago, Shawn wrote about Facebook’s potential as a killer collaboration tool for enterprise. The same set of tools could be equally useful for everyone else, especially students. Most high school and college students haven’t even heard of Google Docs, even though they could benefit significantly from it. Since students spend so much time on Facebook anyway (and most of their friends are on it as well), it is a very logical place to share and collaborate on documents, spreadsheets, and presentations.

Needless to say, these apps aren’t easy to build. But Facebook might just be the perfect fit for them. The market for online collaboration apps is still very immature, mostly because of a lack of consumer awareness. Whether Facebook intends to build them alone, or whether someone else seizes the opportunity, the company is clearly setting a new tone with each step it makes. Like its initial user base of college students, it’s possible that Facebook is growing up and becoming a productive member of society?

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Via SAI, Lookery CEO Scott Rafer is claiming that Facebook’s latest redesign will effectively kill the Facebook Platform. He’s not entirely wrong; many popular Facebook apps will die.

But this isn’t the the end for the Facebook Platform. It’s actually just the beginning.

The redesign has fundamentally changed the way people utilize Facebook apps, which are no longer featured prominently on users’ profiles. To access them, a user must click the applications tab, or open them via the toolbar on the bottom of the page. With these increased costs, users will need greater incentives to use applications. Like on a traditional desktop operating system, a Facebook app will need to provide real value in order to become relevant.

Because of this shift, we may see less apps, but the ones that remain will likely be far more useful. This could include an office suite (like Zoho or Google Docs), a video chat center, or existing apps that let users share media (i.e. iLike). Apps will become less about adding “cool stuff” to your profile, and more about providing real value to your network (and in turn back to yourself).

In the early 1980s, Atari dominated the small, but established, home video game market with a system that offered a flood of cheap and simple games. Five years later, as Atari and the industry was nearing collapse, an upstart video game maker brought out a new system with a new business model: make the barriers for game developers high, so that only quality games make it into the consumers’ hands. In doing so, Nintendo created a whole new industry, bringing quality video games to the masses.

Whether it’s entertainment, or productivity, Facebook’s redesign raises the bar for application developers. In doing so, Facebook isn’t killing its platform, it’s making it infinitely more useful.

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Recession or not, after stocking up on inventory for weeks, the new Macbook Pros appear to be sold out online and in stores across the world. I ordered a new 15″ Macbook Pro last Wednesday from apple.com, and the status is still listed as shipping 3-5 business days. Several friends have been trying stores in California, and are being told “inventory may be in stock next week.” Macnn is reporting similar results in London and Toronto, as is the twittersphere.

While it’s entirely possible Apple is purposely “under-supplying” to create scarcity, it appears that demand is nonetheless very brisk. This could be a very good omen for their previous quarter’s results, which are due out this week.

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According to TechRadar, Mark Zuckerberg says that people are more willing to share personal information than ever before, and the amount they share online will continue to grow exponentially. He even mentioned that that there may be a “historical analogy [to] Moore’s Law“.

It’s interesting to see this play out on Facebook. While it’s clear that society as a whole is trending towards transparency (at an exponential pace), it’s not as obvious that personal information follows the same trend.

My interpretation has long been that people will continue to trade personal privacy for tools and services that add value to their lives. Whether it’s a location-based social network that might make navigation easier, or Facebook status updates that serve as a personal marketing tool, when an application provides more value than the privacy of the information underlying it, people will relinquish that information.

The question is whether this exponential growth in personal openness will continue to be controlled by each of us individually, or whether we will ultimately voluntarily relinquish control in favor of additional value to be gained by doing so. If I invented a technology that could locate, and continuously track in real time, every pedophile without their permission, would we as a society accept this tool? What about a tool that functioned as a Yelp for potential boyfriends or girlfriends? Is this new guy going to cheat? See what his previous girlfriends had to say.

At the end of the day, society as a whole will function like the individuals that comprise it. When and where the value provided to society exceeds the costs to the individual, we will support the voluntary and sometimes involuntary releases of private information.

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Collaborative tools for enterprise customers are all the rage right now. Microsoft, Google, Cisco, IBM, HP, and Oracle, among others, are all getting their feet wet in this space. And there have countless Twitter-for-enterprise startups popping up in the past couple of months, including TechCrunch50 winner Yammer.

But it’s Facebook that already has the killer platform. No, this has nothing to do with the social graph; this has only to do with their technology, which already includes instant messaging, full messaging (although this is still subpar), micro-blogging, full blogging (through notes), and countless other social applications (a number of which are actually useful).

So what can Facebook do to create a sellable enterprise product? Here are some ideas:

• Create company-specific portals. Essentially, allow customers to create their own internal site (with their own domain) running Facebook’s software.
• Build (or buy) productivity tools, analagous to Google’s Docs, Spreadsheets, and Presentations. The files should be fully encrypted, so that only the customer will have access to them.
• Make the mail system able to integrate with the customer’s internal e-mail.
• Make all employees on the system friends by default. Allow the customer’s management to create groups.
• Ditch the regular News Feed, in favor of the all-inclusive Live Feed. Create another tab for group Live Feeds.

This is a product a company could get a lot of value out of. Employees could engage each other socially in a familiar format, while also increasing their own productivity.

Facebook’s new design (emphasizing feeds and featuring an applications bar on the bottom) is perfect for this type of usage. And most of those above points could be done within a couple months, if not weeks.

With that said, Facebook could be facing an uphill battle in changing its brand from a 21st century timewaster, to a premium efficiency tool. And it’s not easy to create a major footprint from scratch, especially when existing players like Cisco are getting into this same space.

But Facebook is sitting on a terrific product, and could create a great business with it. That is, if recently departed co-founder Dustin Moskovitz doesn’t beat them to it (anyone else have that thought?).

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Mark Hopkins wrote an interesting post on technology and the recession. While I disagree with Mark on “kids” being any more susceptible to group psychology than adults, the post touches on something that we should all be keeping in mind.

In investing and in business, when everyone is running in one direction, I tend to at least start glance the other way. In the case of the economy, general sentiment right now is incredibly negative. And there is a good reason for this if you’ve just watched your retirement savings or personal portfolio evaporate. While things may get worse, and there are certainly a lot of negatives to dwell on, there are also some enormous positives that we should not overlook.

As a society, we have the most efficient, entrepreneurial, and technologically advanced economy that has ever existed. As Mark noted, the barriers to entry in creating new companies (good and bad) are so low that literally anyone can do it. A startup today (in sectors as diverse as greeting cards or news) can compete, right out of the gate, with Fortune 500 companies (and sometimes win). At no point in history has it ever been easier, faster, or more cost-efficient to bring innovations into being.

Likewise, while commodity prices are still relatively high (food, gas, metals, baby oil), over the long term technology continues to bring the cost of everything down. Whether it’s genetic engineering of seeds, or advanced inventory systems that help Wal-Mart deliver t-shirts for $2, or $800 Macbooks that would have cost $2,000 just 5 years ago, technology continues to level the playing field, granting the rich and the poor increasingly equal access to resources.

There is also a level transparency that would exceed the wildest dreams of just about anyone in 1987 or 1929. Want to know who built that building you just walked past? Maybe you want to learn to build a web site? Or perhaps you just want to understand how a credit swap works. Anytime/anywhere information allows all of us to build, create, evolve, and solve the biggest challenges, with a speed and efficiency that is easy to take for granted.

At the end of the day, a society’s economic standard of living is based on the ability of its people to do more with less resources. Less time, less money, more output. The United States (and, increasingly, the world) is filled with brilliant, creative, and entrepreneurial people. This financial downturn may take a serious toll, but the tools that we have to deal with it are the best they have ever been.

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“The iPod has sort of lived a long life at number one. Things like, that if you look back to transistor radios and Walkmans, they kind of die out after a while.”

- Steve Wozniak, Apple Co-Founder

The iPod isn’t quite dead yet. But it’s certainly closer to its endpoint than its inception.

Just like transistor radios and Walkmans, the iPod is being rendered obsolete by more powerful devices. The primary one, of course, is Apple’s iPhone. But smartphones in general are becoming cheaper and, in turn, more pervasive in the market. As more and more phones become media players, the standalone iPod is becoming a bit superfluous.

For the same reason, Amazon’s Kindle, a standalone e-book reader, is facing an uphill battle.

I don’t want to shortchange the Kindle. It’s a good product with a lot of cool features, and has generally gotten very favorable reviews. It also has some important competitive advantages over the iPod Touch, such as the electronic-paper screen, and immediately accessible content (including all the major newspapers, and just about every new best-selling book). Jeff Bezos has done a fantastic job evangelizing it, and it has sold better than I would have figured when it was announced.

But it’s not a phone, and I need to carry my phone with me. Bringing along another device (and paying $359 to have it), when my iPhone has just about all the same capabilities, is a hassle.

And make no mistake, the iPhone is a very good e-book reader. It may not be the perfect screen for reading long books on, but your eyes won’t fall out either. And while Stanza’s collection may seem out-of-date, its desktop client allows you to upload any e-book to your iPhone’s library.

There’s certainly some disagreement on this. But in the end, the reality is that people won’t carry an extra device (let alone an expensive one like the Kindle) when there is a pretty comparable product on the device they already own.

It’s too bad, in some ways, since the Kindle could have been a tremendous seller had there been great demand for e-books in the pre-smartphone era. Cellphone novels have already taken off in Japan, and I have a hard time believing Americans won’t be reading books on their wireless device soon enough.

But it’s already too late for the Kindle to become anything more than a niche product. E-books may thrive soon enough, but they will have to do so on phones, not standalone readers.

Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com

According to several reports, Apple has already beaten its 2008 sales goal of 10 million iPhones. The big question for Apple investors (full disclosure, I am one) is how much the economy will affect the company’s numbers over the next 6-12 months. While it’s almost impossible for them to go unscathed during a massive downturn in consumer spending, there is significant reason to believe that Apple may be far better insulated than the market is currently assuming.

Most of the analysis I’ve read seem to be missing a few key points:

1) iPhones Are Cheap:

While the iPhone only represents a fraction of Apple’s earnings, it is a significant driver of new income (and free cash flow). What’s interesting is that only 1/3-1/2 of it is actually coming directly from consumers in upfront costs; the remainder is being fronted by AT&T. So while there are a slew of new smart phones entering the market, the iPhone is not only the best one available (arguably, I guess), but also one of the cheapest.

Now, there’s an argument to be made that this initial discount is more than made up for in the ongoing service costs. This may be true, but the reality is that the cost for voice/data plans amongst the two biggest carriers (AT&T and Verizon) are very comparable. So while some cash strapped consumers may flee to discount carriers (Sprint, T-Mobile), the iPhone is still very price-competitive with just about any smart phone on the market.

There’s also some concern that consumers will trend away from smart phones in the next few months, opting for less expensive traditional phones. But this doesn’t take into account that smart phones are now as cheap as traditional phones were, going back even a year or two. With the added productivity smart phones bring, its unlikely that consumers or businesses will reverse this transition.

2) Apple Computers Are Also Getting Cheaper

Apple’s primary earnings source is, of course, its Mac business. Analysts are concerned that margin compression, combined with a macro-induced slowdown in computer purchases, will ultimately tear into Apple sales.

As I’ve written before, though, Apple seems to be making manufacturing efficiency one of their core competitive advantages. Over the last two years, the company has made Macs more price-competitive (essentially in line with comparable PCs) without impacting margins. Rumors about their new “Brick” manufacturing process seem to be leading down this same path. Of equal importance, as the #3 computer manufacturer, and #1 portable manufacturer, Apple has an increasingly unique ability to leverage economies of scale. Combined, these factors offer significant hedges against margin deflation, even against a backdrop of declining prices.

3) Apple Will Probably Introduce a Sub-$1000 Laptop Later This Month

While these are certainly just rumors, there seems to be increasing consensus that the new MacBooks will begin at a price point under $1000. This, obviously, is a key space to compete in during a downturn. If the rumors are indeed true, Apple will likely not only prevent consumers from “trading down” to other manufactures, but they may actually accelerate sales volume in segments they previously have not competed in.

Long story short, Apple is offering some of the best products, with what could be the best cost efficiency in the industry. For the last five years, they have grown exponentially as more and more people become aware of the benefits of their products. There is no reason to believe that this trend is over. While the market may continue to hammer the stock, there are plenty of compelling reasons to believe that Apple will continue to deliver stellar performance, and be one of the few tech companies that is well-suited to handle the recession.

UPDATE: Piper Jaffrey today apparently seems to concur with much of the above.

Feedback? Write a comment, or e-mail the author at lee(AT)squawkingtech.com