Investors Might Not Like Facebook, But They Love LinkedIn

Monday, 27 Aug 2012 03:02 PM

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Facebook shares have plunged since the popular social networking site went public in May, though one such company has become a darling in the eyes of investors — LinkedIn.

Facebook shares have fallen 50 percent since going public in May, while LinkedIn, the professional networking site, is reporting a series of milestones.

Revenue was up more than 89 percent on year in the second quarter, while the company’s shares are trading at 751 times earnings, The Daily Beast reports.

Editor's Note: Google Banned This Video But You Can Watch it Here

For every hour a Facebook user spends on the site, the company makes 6.2 cents, while LinkedIn makes $1.30 per user per hour, the Daily Beast adds, citing Forbes research.

While Facebook has 900 million users, LinkedIn has only 175 million, though larger institutional clients including headhunters and human-resources departments use the site to hire employees as well as build business ties.

“LinkedIn’s success centers on its ‘hiring solutions’ business, which helps corporate recruiters find job candidates. Revenue from those clients accounts for 53 percent of LinkedIn’s business — and, more important, has more than doubled since last year,” The Daily Beast reports.

“More than two thirds of the Fortune 100 are LinkedIn hiring-solutions customers.”

Although LinkedIn does bring in advertising revenue in the same manner as Facebook does and it does offer premium services for pay like news media sites do, business solutions set the company apart.

“Only 32 percent of LinkedIn’s total revenue coming from advertising. Moreover, by targeting the professional audience — buyers of enterprise products, not Brazilian waxing products — its ‘marketing solutions’ department can bring in more dough than traditional online advertisers,” The Daily Beast adds.

“LinkedIn also uses the traditional ‘premium subscriptions’ strategy, but doesn’t depend on it. Account upgrades, which streamline the otherwise-clunky interface, bring in 19 percent of the company’s revenue.”

The company is also set to give a makeover to its user profiles as well.

“We are focused on making it easier for LinkedIn members to get more value out of the services we offer by creating simpler, more relevant, more social experiences,” a company spokeswoman tells the Los Angeles Times in an e-mail.

“This new look and feel to the profile is the first step of many more exciting changes to come to the LinkedIn profile later this year.”

Editor's Note: Google Banned This Video But You Can Watch it Here

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