LinkedIn is doing well in this recession.  According to Hoffman:

We’ve been profitable the last two years. Q4 was actually our highest revenue quarter ever.

Not surprisingly, recruiting is one of LinkedIn’s three primary revenue sources, along with subscription fees and advertising. In Hoffman’s words:

We have a software-as-a-service business primarily driven by recruiting. And as a surprise we are actually doing quite well at that currently. You’d think that with layoffs and everything else that that business was being hit. Currently, we are the disruptive low-cost provider of really good hiring services, and when you are hiring 50 people as opposed to 1,000 people we are still growing there…

I find that “disruptive, low-cost provider” comment to be especially telling. Many startups claims to be disruptive, but when you actually kick the tires, few truly are. If LinkedIn is growing its market share of dollars spent while just about every job board is shrinking, it sounds about right to me.

LinkedIn is now allowing group members to post job openings at no charge. The jobs are separate from the group discussions and have their own channel. Only other members of the group have access to the jobs, so while that reduces the overall visibility, it makes it possible to highly target job openings.

If LinkedIn announced this feature anywhere, we missed it. Nor could we find anyplace on the site itself explaining how it works. What it looks like, though, is the job posting rules are the same as participating in a discussion. Only members of a group can post a job. And the jobs aren’t included in the main, fee-based job board.

So this looks to us like more of an opportunity for specialty recruiters already participating in groups where they fish. It’s also likely that recruiters may start joining more groups.

We suspect that eventually LinkedIn will open up the group job boards to anyone for a fee. But that’s just a guess.

That alone makes the announcement news, but this is a game-changer. Even more important than the access it gives recruiters to two of the largest networks in the world, is the validation Jobvite is bringing to all those predictions about the value of social networks as a recruiting tool.

No need to point out that recruiters discovered social networks almost as soon as they came along. That’s true enough, but consider how they’ve been used for recruiting. It’s mostly been a passive exercise with Facebook and MySpace widgets enabling a company’s jobs to appear on individual pages. LinkedIn and others of its kind have been mostly a source of leads.

In the one instance, the social networks are little more than a job board in new clothes. In the latter case, it requires active recruiter time to source candidates, more targeted perhaps, but functionally not a whole different from using Google or Yahoo or other research tools. As recently as last summer Kevin Wheeler was predicting that eventually social networks “will become core to good recruiting and talent management,” though he called them “over-hyped and poorly used at the moment.”

Jobvite’s announcement today, and last week’s from Appirio, are bringing us closer to realizing as practice what Wheeler astutely saw as a trend. What the new tools from both companies do is to leverage social networks in a directed manner. Where referral programs pioneered by the likes of companies such as Jobster (site; profile) scattered job opening announcements like seeds in the wind, Jobvite and Appirio tell participating employees who among their contacts would be a best fit. Forwarding the opening is still up to the employee, but at least it won’t be an address-book dump.

So similar are the tools from the two companies that you have to wonder if it’s one of those natural evolutionary paths or someone was peeking in someone else’s window. Both also operate pretty much the same way.

Here’s how the new Jobvite tool works: A participating employee opts in to the program by logging into their Facebook or LinkedIn account (Appirio’s took works only with Facebook) using the Jobvite service. Jobvite then analyzes their Facebook friends and 1st-degree LinkedIn contacts, matching them to jobs on the basis of the skills they list, the job titles and companies in their profiles, and other relevant information. Matches are reported to the employee who chooses to forward — or not — the job opening.

This is where the Jobvite tool parts company with Appirio’s tool to go a step further. Actually, it goes many steps forward: A recipient of a job announcement who decides to forward it to their contacts can also opt-in for the matching feature. So even if you have no connection to the company that has the job opening, you can see who among your contacts is a good fit and forward it only to them. And so long as the referrals are made via the link in the email, everything is tracked so the recruiters know whence came the referral.

“In a world in which the job seeker is changing,” says Dan Finnigan, CEO of Jobvite, “It’s obvious the backend side of e-recruitment is going to change.” In this case, Jobvite’s created a sort of guided viral program that leverages the information individuals volunteer about themselves to find the best match among their employees’ contacts.

There’s plenty more to like about the new release. Interested referrals who choose to apply can use their online profiles, instead of a traditional resume. There’s also a LinkedIn widget they can use to find out who works at the company, should they have questions or want to make a direct contact. There’s also a Twitter application to send job invitations to followers and, if they have posted a Twitter profile, to offer up matches.

“People want to use their networks to do their jobs better,” Finnigan was saying as we talked about the social networking phenomenon. “The people who do that have friends and contacts who do that too and those are the people recruiters want to reach.”

Despite the tracking, Finnigan said neither Jobvite nor the employer ever learn who is in anyone’s network (except, of course, should one of them apply for the job). The way both the Facebook and LinkedIn APIs work keeps the data from flowing back. Jobvite neither stores nor retrieves data.

One interesting aspect is that the APIs these social networks make available have a value that Appirio and Jobvite and others still to come are commercializing in an important way. LinkedIn sells a recruiter service itself. So how long will it be before the network operators start to charge for this kind of access? That will depend on how well these recruiting programs pan out and especially how much more efficient they are identifying good candidates.

How good, then, are the matches? That all depends on how good the profiles are and how well designed the job description is. Jobvite’s analysis uses job titles, geography (location), education, skills and keywords. For competitive reasons, Finnigan didn’t get too specific about the algorithms Jobvite uses. But he did say the system is heuristic. “It has to learn over time,” he told us. “Suffice it to say there is a feedback loop.”

Chances are it uses fairly standard matching developed by the ATS builders as a starting point, then learns to give more or less weight to certain terms and their proximity to each other based on things like whether similar candidates in the past applied for the job and whether interviews were scheduled and possibly even if offers were made. (Jobvite is a recruitment management system that includes calendaring, CRM, ATS, and offer management.)

As Finnigan added, social networking and the kinds of tools that Jobvite is introducing, are the future of recruiting.

We ran a webinar today with Elaine Orler and Jason Corsello of Knowledge Infusion about what changes we should expect from recruiting technology in the next year.

I learned a lot on the call, but one of the polls that we took really made me stop and think. Here it is:

That LinkedIn was the most popular did not surprise me — it’s not exactly a secret that it has become one of the critical tools of our profession. I was surprised that LinkedIn was such an overwhelming favorite – nobody else was even remotely close.

The way we asked the question had people answering which of these services they are most likely to use the most. But I wonder — if we had phrased the question to ask if recruiters are using these sites at all for professional services, would the answers have been any different?

Asked a different way, aside from a very small portion of the recruiting community, are we really using social media effectively?