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LinkedIn Revenue Jumps 59%

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LinkedIn Revenue Jumps 59%

 


LinkedIn Corp (NYSE: LNKD) announced a revenue surge that was far beyond expectations of analysts when second quarter revenue skyrocketed by 59%.


  • Revenue stood at $363.7 million in the second quarter this year, while expectations were around $353 million.

  • Earnings per share were at 38 cents for the second quarter, while the prediction amounted to 31 cents.

  • Revenue from the US alone totaled $224.3 million, or 62% of total revenue.

  • Revenue from other markets around the world came to a total of $139.4 million, or 38% of total revenue, which means that there is certainly high potential to improve on this outside of the US market.

  • Marketing revenue stood at 24% of total revenue of the company for the second quarter of 2013, which is however a fall on the second quarter of 2012 (28%).

  • Premium subscriptions increased over the past year from 19% of total revenue in 2012 to 20% in the second quarter of 2013.


LinkedIn has 238 million users today and despite the fact that it is reaching saturation point with regard to office workers and executives, they have recently managed to renew interest by posting blog articles from prominent actors in the economy to attract greater attention and coverage. 238 million people using LinkedIn is 37% more than this time last year and a 9%-increase from Q1 2013. Chief Executive Officer, Jeff Weiner stated: “In Q2, we made steady progress towards our goal of becoming the definitive professional publishing platform where professionals come to consume relevant content and publishers come to share”. One particular blog post written by Bill Gates about Warren Buffet managed to haul in 1 million views in just a couple of days.


Social media companies have increased in status over the past few weeks. In particular, Facebook has rebounded back to the level prior to the fateful crash of its share price related to the disastrous Initial Public Offering in May 2012After the dismal launch on the NASDAQ, Facebook shares grew steadily and there were surges in revenue due to marketing media and the use of advertising embedded into smartphone and tablet applications. Its net income stood at $331 million in the second quarter of 2013, which is a vast improvement on the $157-million losslast year at the same period. Revenue reached $1.81 billion, a hike of 53% in comparison with revenue recorded lastJune, with 41% of that coming from advertising on mobile phones and tablets.  The advertising technique used was to embed adverts into the newsfeeds of people having the added bonus that they would be considered to be real news events and not just pure advertising.


Facebook Mobile Ad


Facebook Mobile Ad


LinkedIn will be able to probably do much the same sort of thing as Facebook. Just like Facebook that has started already incorporating adverts into the mobile version of their application, LinkedIn has also started recently doing the same thing. The ads look just like user-generated content, which makes them more acceptable and digestible. Although, the question should be asked as to how long the user will agree to be fooled by such marketing techniques. When the user catches on to the fact that the posts are nothing more than dissimulated advertising, it will not go down well. Although, to all intents and purposes, the user is a captive audience and can do nothing to get rid of the ads. He will just have to grin and bear it, because they don’t look as if they are going to go away. The beginnings of ads on LinkedIn will show promising results as with Facebook most certainly in the coming months. They have already had very promising results. Since LinkedIn has been using the blog posts and the Facebook-like ads, they have managed to double visits to the site in just one year. It is probably hardly surprising that the number of visits to LinkedIn has nearlydoubled, however, since given the current economic climate, people are using every means to find a job and gain employment.


LinkedIn went public and was launched in 2011, with the share value at $45 then. Stock finished trading at $228.5. At the close of trading yesterday those shares were up by 4.52% at $213 (+$9.21). We shall probably see a further rise today when the markets open in the US.


Sales for the third quarter 2013 have been estimated by LinkedIn at between $367 and $373 million. Its full-year revenue has been estimated at $1.46 and $1.48 billion.


Just how much advertising we will be able to take is a whole different matter. The number of smartphone users and tablet users is on the up every day throughout the world, but are we really prepared to be bombarded with advertising not only when we sit down to watch television, when we open the papers, when we surf on internet, when we walk through the streets and drive down the roads, but now we will have advertising when we use our tablets and smartphones on social networks.


Is there a safe haven somewhere that is left? A small tiny space left for me?

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Earnings News Trading Ideas

 

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