The business oriented social networking site LinkedIn announced this morning that it was giving DeMatteo Monness exclusive access to a, “proprietary set of search tools and promotional services,” that will, “enhance the overall depth and breadth of the DM Consultant Network.”
DM is a player in the burgeoning field of expert networks–connecting businesses, primarily hedge funds and financial players, with hand-picked specialists in order to provide highly relevant ad-hoc analysis and consultation of businesses they may not be familar with.
DM’s deal with LinkedIn, which boasts 42 million profiles, including executives from every Fortune 500 company, is a coup in the growing business of expert networks consultancies.
A source tells SAI that the deal is a, “big blow to GLG,” or Gerson Lehrman Group, the established top banana, with an “expert council” membership of nearly 200,000. GLG, privately held, has had valuations approaching $1 billion. It also has relationships with Credit Suisse and the other major banks. Last year the company made $284 million in revenues, according to Financial News. DM’s revenue is thought to be in the $10-50 million range.
The source says the deal gives DM an advantage over GLG in three big ways:
- Recruiting – Expert network consultancies live and die on the quality of the experts they bring to their clinets. LinkedIn has become the go-to database for these networks to find and recruit new experts for the clients. With this deal, DM gets to crawl LinkedIn for fresh blood in a way no other consultancy can.
- Branding – Networking with enough business people and you’ll soon hear, “I don’t Facebook or Twitter, but you can find me on LinkedIn.” The site is the premier brand for professional networking and DM’s reputation will be bunished by the association. GLG, the biggest expert network around, won’t be able to make that claim.
- Negotiating power – GLG experts cost their clients two to three times as much as the competing networks. GLG got away with this by arguing their expert network is unmatched. This deal will help DM and every other expert network argue that GLG is no longer top dog, opening up bidding wars and possibly forcing GLG to lower its prices to stay competitive.
The source says the deal is, “significant – shows how much LinkedIn wants to hurt GLG.” LinkedIn once tried to compete directly with GLG with its LinkedIn Expert Network, but compliance issues made their product unattractive to the hedge fund and private equity money that drives the business. The deal with DM puts all of their 42 million profiles under the auspices of an expert network that knows what they’re doing–and one that can immediately start stealing GLG clients who are choking on the higher price point.
Correction: An earlier version of this post said GLG has 20,000 experts. It’s 200,000.
Business Insider Emails & Alerts
Site highlights each day to your inbox.