LinkedIn (
LNKD
) stands to gain significantly from higher user engagement through
its fresh product offerings. We like the company's new initiatives
that helped drive strong top-line growth across business
segments.LinkedIn's big winner in Q1 was its ads & marketing
division that grew by almost 40% in revenues year-over-year (YoY).
Going forward, we expect innovative offerings to drive further
growth for the division helping the company in the online
advertising space against competitors such
as Facebook, Yahoo (
YHOO
) and Google (
GOOG
).
We have a revised
Trefis price estimate of $34 for LinkedIn's
stock
, which is well below the current market price. Refer to our
article
Why LinkedIn's Fundamentals Don't Support the
Market Price
on why we think the market is getting ahead of itself on the
company.
Enhanced User Experience Help LinkedIn's Ads
A key metric we watched this quarter was LinkedIn's total page
views, which stood at around 7.1 billion up from its 4.5 billion
quarterly average in 2010. The boost in page views is due to
the launch of various new features by LinkedIn that have served to
increase user engagement. A couple of these include LinkedIn Today,
a customized news offering based on the members' choice of industry
and relevance, and LinkedIn Skill that helps members stay ahead of
the competition by discovering hot skills that other professionals
are adding to their profiles.
Going forward, we retain our page views per unique visitor
target of around 37 this year as LinkedIn continues to provide
useful add-on features on its site.
Whats Happening for the Employer & Job
Seeker?
LinkedIn's growth in the second half of 2011 should be driven by
two strong initiatives on the employee & employer side.
Firstly, LinkedIn's jump to the mobile app bandwagon has shown
strong results, with its mobile page views increasing about 400%
YoY.
Given the ever increasing presence of smartphones and tablets,
LinkedIn's apps should be a major contributor in increasing job
listings for both its recruitment and premium subscription
segments. However, competitors are not expected to stay far behind
in the app space, such as Monster's recently unveiled BeKnown
app.
Another significant feature launched very recently is a new web
plug-in: Apply With LinkedIn. Companies can have this button on
their own websites where job seekers can directly apply through
LinkedIn. This should make the recruiting process easier for
companies enabling them to track interested candidates more
efficiently.
In the long run, both the above initiatives can provide a strong
upside to job listings as well as the number of corporate customers
on LinkedIn.
See our complete analysis for LinkedIn stock
here