This was a comment on this thread, which I decided to just reformat as a blog post, adding a few lines here and there to extend/clarify.

The evergreen "Recruiters are finished" will never, ever, ever come true. Firms have a qualification view of people, while Recruiters have a market view of people. The two mindsets will never go away, and the market view is the more powerful and accurate one (duh). Firms will always need intermediaries because game theory says that input (recruiting fees) that changes game conditions (enforcing asymmetric information among players) is well worth the expense if the changed game conditions are plus-sum for most or all players, which they appear to be.

Moving from one tribe to a new tribe is always, always, always going to be a decision and process fraught with emotional and symbolic meanings that technology will be challenged to decode, but which skilled Recruiters handle automatically. The massive, overwhelming legal difference between a candidate and a new hire will always constrain direct hiring entities in ways that Recruiters are not subject to. None of these facts are open to change.

Now that we know that Recruiters are not going extinct, I can offer that I think LinkedIn is very disruptive and hugely valuable; so it's both a threat and opportunity to our business. If they offer ATS, they will get a lot of share quickly, esp. with low-complexity users, but an ATS (and I hate that term with a passion) is not just a database by any means, and thinking of ATS as mainly a resume store is a decade out of date.

A well used ATS has massive input from its recruiter-users to create/transform data into usable information, in arrays that LinkedIn could never replicate, unless it was providing the platform, which is a business challenge on many levels beyond just providing a tool. If they don't work closely with major ATS companies (who matter because they have major customers), they risk missing chances to add to the value chain (which is never helpful) and motivating combinations of other potential recruiting disrupters like Monster, Google, CB, etc.

They also have their own meta worries- if Facebook figures out a clean way to provide a "professional" half and a "personal" half, LinkedIn will be the first and biggest casualty. How many online "platforms of record" does an individual need ? If the answer is about "One", LinkedIn better get busy with that value chain.

I think the two big lessons LinkedIn reveals today are that work is not social, (per se), and that of all the potential for 'networking' and 'social' media that LinkedIn first started with, clearly Recruiting has become its Raison d'être, which says a good thing about our industry and its role in making the world go 'round.

LinkedIn could have been Facebook, which may dilute the kool-aid when you think about it for a minute, since they had a years-long head start.

I think LinkedIn should start working, hard, with everyone in the 'sphere to establish themselves as value drivers in each area: candidates, corporations, third-party staffing/recruiting industry, and HR service vendors, because all are interlinked in their own value chains. So far, I'm unimpressed with their efforts to do that.

The right model may be the financial world, which has similar complex crossovers among target value receivers and providers, with LinkedIn potentially a form of exchange or rating entity that seeks to provide value across the board and becomes indispensable by complex connections and arms-length dealings, rather than strict marketing success year-to-year in gathering eyeballs or playing fashionable favorites in deciding which partners to promote and which to suppress.

They are a giant in the space and we are watching them every single day. No R&D plan in our space is complete without some work on bringing more value from LinkedIn.