I can still remember two years ago when a friend and erstwhile client from the United States sent me a link to www.LinkedIn.com. While today social media is a rage, back in early 2006 ,LinkedIn re-defined social networking from chatting with teenagers to actual value delivered to customers. Over a period of time both my network and LinkedIn grew- my network is now 6200 members , Decision Stats on LinkedIn has 570 + members and LinkedIn has 30 million people and a reported 1 billion dollar valuation.
Yet Life on LinkedIn has been slowly losing interest to the point where it is now just a directory service of contacts.
Some reasons for the declining relevance of LinkedIn are –
1) Average User Interface Updating- While www.Facebook.com successfully transformed itself into a new look for 70 million users, the UI at LI does leave some things to be desired. Some glitches include a slower than promised rollout of third party applications, and bugs aplenty in the way you update your status, how to remove connections and the new cluttered home page.
2) Thrust on Groups rather than content (Questions and Answers)– Q and A at LI were a great interactive feature as people answered and posted interesting questions. This has been reduced in focus, by the group discussion features which are a half way effort from the discussions free for all and making a newsletter happen for the group. Many successful LI groups made the transition to being full communities in their own right, mostly using www.ning.com .LI was also unable to capture the whole value chain of engaged communities by not having a newsletter function in the groups, and by group owners not being able to customize stuff.
3) Top Down User Limits– Limits on groups being at most 50, invites being at most 3000, meant that slowly LI was punishing active users more than controlling spam. The Open Networkers movement (people who network openly with everyone) was neither predicted nor monetized well by LI.
4) Inability to monetize recruiters fully (they exist and flourish thanks to LI’s inability to fully channelize them into a paying media), not able to cut down on spam (which exists in much bigger volumes now due to bigger user base now), and refusal to create connection specific privacy (as in Face book which allows you to keep levels of privacy display for your connections) are other reasons for the decline.
LI has been a pioneer not only in professional networking but also in using non ad pricing strategies in keeping a steady cash flow. Some new features like LinkedIn Polls are promising , and hopefully the next generation of Third Party applications would make the site interesting again.
So there is hope it will get its act together again. However in a very competitive online ad market, time and speed of reaction are critical. LI does have the first mover advantage, but it can lose relevance just like the Lycos and the Yahoo did if it changes slower than users want it. With the current recession, it is an opportunity for communities like LI to tap into the recruiting market and also focus on owning, creating , if not enabling ,relevant content for reading and sharing by users.
DECISION STATS 
Pure common sense says that any company that starts annoying customers and users like that risks losing it. But that is the way it is.
You have some great points. I have a free membership and tried to find contacts in my area code. LI only gave me 300. If I wanted more, they wanted me to upgrade my account. I’ve also noticed when I try to mass accept invitations, about half or more are not accepted. So I have to accept one at a time and I am so behind. Thanks for posting.