Xing has come in for some negative comparisons over the last while for being a weak European version of LinkedIn, but they are now registering very healthy numbers, having taken over Turkish business-people social network

Cember.net during the year, and Spanish networks eConozco and Neurona the previous year. Much of the revenue has come in from online ads (premium members have an ad-free service, but banner ads are seen by others who look at their profiles). These brought protests from users originally, but that doesn’t seem to have hurt too much!

According to Heise Online (my translation):

The online portal operator Xing has nearly doubled its revenue in the past quarter … the company also celebrates the best quarterly sales in its history, at 7.51 million euros. In the same quarter of last year Xing’s revenue was 3.93 million euros. The operating profit … amounted to 2.64 million euros, compared to 0.53 million euros a year ago.

The company … attributed the increase in sales mainly to the growth in paying ( ‘Premium’) members. In the three months to the end of March there were 58,000 new registrations, and within the year an increase of more than 60 percent to 420,000. A big turnaround in Xing now - also due to acquisitions - with 5.71 million users, 170 percent more than a year ago.

The business model introduced in the fourth quarter of 2007 led to 20 percent of total sales in the first quarter of 2008, Xing stated further. It accounted 520,000 euros to ‘Advertising’ and 960,000 euros to ‘commerce’ with the ‘Xing Marketplace.’ Xing was founded at the end of 2003, then still under the name BC Open. Premium members pay just under 6 euros per month for a ‘broader range of services’.

Der Online-Portalbetreiber Xing hat im vergangenen Quartal seinen

Umsatz fast verdoppelt. Mit 7,51 Millionen Euro feiert das Unternehmen

in einer Mitteilung

zudem den besten Quartalsumsatz in der Firmengeschichte. Im

Vergleichsquartal des Vorjahres hatte Xing 3,93 Millionen Euro

umgesetzt. Das operative Ergebnis vor Zinsen, Steuern und

Abschreibungen (EBITDA) betrug 2,64 Millionen Euro gegenüber 0,53

Millionen Euro vor einem Jahr.

Das Unternehmen, das sich als Netzwerk für Geschäftskontakte

bezeichnet, führt den Umsatzanstieg hauptsächlich auf das Wachstum bei

den zahlenden Mitgliedern (’Premium’) zurück. In den drei Monaten bis

Ende März seien 58.000 hinzugekokmmen, innerhalb eines Jahres mehr als

60 Prozent auf 420.000. Insgesamt tummeln sich bei Xing nun – auch

bedingt durch Übernahmen – 5,71 Millionen Nutzer, 170 Prozent mehr als vor einem Jahr.

Die im vierten Quartal 2007 eingeführten Geschäftsmodelle

haben im ersten Quartal 2008 20 Prozent des Gesamtumsatzes ausgemacht,

teilt Xing weiter mit. Dabei entfielen 520.000 Euro auf den Bereich

‘Advertising’ und 960.000 Euro auf ‘eCommerce’ mit dem ‘Xing

Marketplace’. Xing startete Ende 2003, seinerzeit noch unter dem Namen Open BC. Premium-Mitglieder zahlen monatlich knapp 6 Euro für ein ‘erweitertes Leistungsangebot’.

According to a Heise Online article, reporting from the first Cologne Web Content Forum, ‘Mit Inhalten ist kaum Geld zu verdienen’ i.e., the chances of earning money through web content are slim. Some of the figures they discussed were:

LinkedIn: Turnover per member per year > $US 5
Xing: pr Turnover per member per year > $US 4
FaceBook: Turnover per member per year > $US 3
YouTube: Income 2007: $US 20 M against business costs of $US 365 M!

The various reasons put forward for this included slower replacement of mainstream media services than predicted, and the sheer multiplicity of services competing for users’ attention.

In a similar vein, an OnlineBusiness-Guide blog Web 2.0: Finding a business model that pays, looks at the difficulty of getting cash out of social network apps, as many assume that numbers will mean ad revenue, even though ads do not necessarily suit each service. He, along with many other commentators, thinks that enterprise apps are the way forward, generating cash for useful social apps through licence fees.

The other way forward could be mobile apps, as Wolfe’s Den Blog in InformationWeek suggests in Web 2.0 Expo Reveals: Mobile Is The New Desktop, Social Nets The New Media Companies. That last suggestion makes a lot of sense to me intuitively, because that’s simply what I see most, and because users already pay according to the time and services used, making micropayment system probably a more straightforward possibility.

It will be interesting to see if Twitter, who are looking to raise $15M at a $60M valuation, get their money, in the light of this picture.