LinkedIn Expands Marketing Solutions - Analyst Blog

LinkedIn Corp. LNKD has expanded its Sponsored Updates, part of the Marketing Solutions segment, through the launch of two Certified Marketing Partner programs — Sponsored Updates Partners and Content Partners.

LinkedIn's Sponsored Updates product was launched in mid-2013, which enabled enterprises and organizations to reach out to their targeted audience by providing company-specific slideshows, articles, videos and whitepapers.

With the launch of Sponsored Updates Partners program, LinkedIn will enable advertisers to join forces with marketing solution providers to improve the ROI of their ad campaigns. LinkedIn has roped in companies such as Salesforce.com CRM, Brand Networks, SHIFT and AdStage for the partnership program. Leveraging the marketing solutions provided by these companies, advertisers can better manage the ad campaigns.

Under the Content Partners program, advertisers can take help from the LinkedIn partner certified publishers and content creators to make relevant and custom ads for target groups. Advertisers can also get help from publishers such as The Atlantic, Bloomberg, CBS Interactive and IDG Communications and content creators like Atlantic Media Strategies, Contently, Freshwire and Group SJR to increase engagement and performance.

LinkedIn's initiatives to increase advertising revenues are praiseworthy and we believe that advertisers are also taking a note of the company's growing user base.  Very recently, LinkedIn's user base touched 300 million globally with more than 100 million users registered in the U.S. The company has witnessed strong membership growth in India and Brazil.

International expansion remains a focal point for LinkedIn. The company recently launched a Chinese language website to expand its presence in the leading Internet market of China. China is a big market and the huge Internet population (513 million) of the country translates into big business for all social media companies. Considering the growth potential in the country and its population, LinkedIn's expansion in the country bodes well.

LinkedIn remains a pioneer and leader in the professional networking space with a wide industry reach which enables it to explore and tap into every opportunity to connect global workforce.

However, continued investments to provide new and improved products and services might affect its profitability. We believe the investments in strategic products are necessary as the company faces stiff competition in the social networking space from the likes of Facebook FB and Twitter TWTR, which are looking for a position in the professional space.

Currently, LinkedIn has a Zacks Rank #3 (Hold).