About Linkedin
LinkedIn is really a huge database of professionals. LinkedIn was started about the same time as Facebook, but it specifically targeted business professionals.
LinkedIn allows you to connect with key influencers and decision makers in your industry in ways that you may have never been able to do offline.
What's Linkedin Business Model?
LinkedIn revenues come from 3 key revenue streams: Hiring Solutions, Marketing Solutions, and Premium Subscriptions.
LinkedIn sells Hiring and Marketing solutions through field sales organization and through their website.
The Premium subscriptions are primarily sold online. Field Sales organization comprises of direct sales force, agencies, and resellers.
While online channel is characterized by lower average selling prices, the offline channel is characterized by longer sales cycle, higher average selling prices, and longer contract terms.
LinkedIn is a good example of a Freemium business model. While the core offering is free for its network members, premium offering comes for a price.
The premium offering includes tools such as LinkedIn InMails and Profile Stats Pro. The users can upgrade from a basic account type to Business, Business Plus, or Executive account types. The premium account types provide
Revenue of Linkedin
The business social network earned more than double the $54.9 million in revenue it generated in Q2 2010.
As a result, the company earned $4.5 million in net income after taxes, according to today's financial earnings report. That's about the same as the $4.29 million it earned in Q2 2010. LinkedIn reported earnings per share (EPS) of $0.04, beating Wall Street estimates that the company would earn $0.01 per share.
The company also released a slew of stats about the health of its social network, claiming record levels of members, unique visitors and pageviews. Unique visitors are up 83% to 81.8 million per month, while page views jumped 80% to 7.1 billion.In its most recent quarter, LinkedIn said page views rose 67% from a year earlier, the company's highest growth rate in 2012.
Data from comScore shows that LinkedIn has bounced between 40 million and 43 million U.S. unique visitors since August.
Why Wall Street Likes LinkedIn More Than Facebook?
1. Linkedin is an enterprise company at the core. It sells its lead enterprise recruiting solution, LinkedIn Recruiter, at a high price-point, as well as a number of other offerings for the enterprise.
Wall Street likely values the long-term enterprise contract revenue at significantly higher multiples than the consumer-facing streams.
Whereas, Facebook makes money in one way: facilitating consumer spending. This generally means more volatility on the path to monetization.
2. LinkedIn, on the other hand, appeals to professionals in the broad 25-to-65-year-old category. Profile information in Facebook is pretty standard. Profile information defined by a far more standardized set of criteria: address, age, work place, job details, academic qualifications etc.
This is easy data to digest and utilize, and it doesn’t change very often. This is also what makes it so valuable and inherently easier to monetize.
Whereas, social identity on Facebook is a complex and ever-changing amalgamation of ideas, interests, thoughts, pictures, places and media that people are perpetually curating and refining as per their tastes and life change.
We all change jobs on average 7 times in our lifetime, and many of us change careers many times as well. Every time we do this we undergo tremendous stress trying to find contacts, develop new friends, and open new doors. This entire process is greatly aided by LinkedIn, and we are willing to pay for this help.
Click here to read edited excerpts of LinkedIn CEO in 2009 interview at wsj.com
LinkedIn also is pushing into content by aggregating business news and hosting expert blog posts, to give professionals more reasons to linger on the site.
The more active its members, the more ads LinkedIn can sell and the more data it garners for its corporate customers' hiring and recruiting needs.
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