) has launched a subscription service called Premium Spotlight for
around $10 per month. This is significantly lower than the usual
subscription charged by the company for its premium services.
Premium Spotlight is a strategic plan to get free members to try
out premium services.
It is worth noting that LinkedIn derives 20% of its total
revenue from Premium Subscriptions, revenue contribution from which
jumped 45.6% year over year in the last-reported quarter
(first-quarter 2014). Higher adoption of the new low-cost plan will
enable the company to generate incremental revenues, going
Apart from this, LinkedIn has redesigned its member profile
pages with larger profile photos and header images. This feature is
reminiscent of the other social networking sites such as
Other newly added features include optimization of profiles with
the use of suggested keywords which enhance search results.
LinkedIn has also included the "Open" setting which allows premium
members' profiles to be viewed by LinkedIn members even outside
their network. While these features are available on desktops,
mobile versions are expected to be released soon.
LinkedIn's initiatives to increase user engagement by adding new
features and providing a lower premium cost are praiseworthy. These
will definitely boost LinkedIn's chances to increase its
paid-membership count. The company has a total member count of 300
Nonetheless, continued investments to provide new and improved
products and services might affect its profitability. Though
impacting LinkedIn's operational performance in the short run,
these investments are necessary for member growth and user
engagement over the long term. We remain encouraged by the 45% to
50% top-line growth recorded in the past few quarters.
LinkedIn thus remains a pioneer and a leading professional
networking company with a wide industry reach that enables it to
explore and tap into every opportunity to connect the global
Currently, LinkedIn has a Zacks Rank #3 (Hold). Investors may
consider a better-ranked stock like
) which sports a Zacks Rank #1 (Strong Buy).
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