BranchOut Raises $25 Million, But Do Privacy Issues Loom?

By Sarah Lacy , written on April 19, 2012

From The News Desk

BranchOut is reporting some impressive numbers today that all strangely triangulate around the number 25. They are the 25th most popular app on Facebook, have 25 million registered users and have raised a $25 million round of financing.

This brings the total amount raised to $49 million. The new round was lead by Mayfield, specifically by Tim Chang, who previously invested when he was at his previous firm Norwest.

That's one confident investor. And with good reason. BranchOut has the largest professional network on Facebook, and Facebook is a pretty large platform. "We're like Coke and Pepsi," says CEO Rick Marini of LinkedIn and BranchOut. His view is that LinkedIn does a better job with the top 10% of executives, and BranchOut does a better job with the rest, or as he calls them, "The Facebook generation."

Its investors are also a veritable who's who of Silicon Valley. (Disclosure: we overlap with several of them including Matt Ocko, James Currier, Stan Chudnovsky, and Accel.)

BranchOut has worked hard, but -- as Marini admits -- it has clearly benefitted from the coat tails of Facebook's stellar distribution network and LinkedIn's proven business model of charging recruiters to mine those collected networks.

It's a bonafide phenomenon for something as boring as a job app: BranchOut is adding 300,000 users a day with little to no marketing. That's two million new users a week.

There's only one potential problem, which I'm surprised hasn't been cited as much of a problem so far. The vast majority of the 400 million profiles in BranchOut's network are of people who have no clue they are in BranchOut's network.

To wit: I have never once used BranchOut. (I plan on staying employed at PandoDaily for a while, so a professional social network isn't my top priority.) I couldn't tell you which friends of mine have used it. But as I said to Marini yesterday, "I'm pretty sure my information is in your system."

"It most definitely is," he said immediately.

Am I getting old or is that a little creepy?

Marini and I talked about this for a while, and he had some reassuring things to say. For one, it's something the company has thought through. They do not suck in things like your friends' interests, photos, videos, or contact information. They only suck in a registered users' friends' names, where they went to school and whom they've worked for.

And it only gets sucked in when that information is already publicly available on Facebook. Anyone who sets a profile to private doesn't get sucked into the system, and you can opt out. So the bigger privacy zealots out there don't have an issue. As I've written before, it's sort of your fault if you put information on a public social network and then get mad when people see it. "The information we are talking about is so benign, it's not the kind of thing people get freaked out about," Marini says.

What makes it slightly ickier -- to me, at least -- is that BranchOut's business model is selling recruiters this database of information. Sure, LinkedIn does the exact same thing, but, again, I know I'm opting into LinkedIn.

To Marini's point, this is all information I've already publicly put into Facebook. But that logic doesn't always stop people from feeling a little weirded out. Just ask Facebook. Every time the site makes gathering personal information more efficient for someone, a certain group of users freak. They don't care enough to stop using the site, mind you. But innovations like the newsfeed have not been without incident.

Ultimately, if you have an issue with BranchOut, it's not the company's fault. It's Facebook you should be upset with. Facebook is the one you trusted. That's the site you opted into. And it's Facebook that is allowing third parties to suck in the data of your friends. Facebook's MO here is providing enough interesting user data that apps other than games find the platform worthwhile.

Per Facebook's APIs, BranchOut could totally suck in more personal data -- Marini is showing remarkable restraint. "We could take your interest data and a lot more," he says. "We choose not to because we are very tuned towards privacy and not being creepy. We're not on the wrong side of that line in the sand."

So far, users don't disagree, and BranchOut has been pretty up front about all of this. The question is when -- not if -- another Facebook app pushes the boundary too far.