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LinkedIn’s Publishing Strategy Kicks Ass

Posted on Monday, Jun 9th 2014

According to an infographic released by Staff.com late last year, nearly 92% of the companies surveyed use the social media for recruiting decisions. LinkedIn (NYSE: LNKD) is the leading professional network choice for companies. 78% companies surveyed were using LinkedIn in 2010 and that number grew to 93% in 2012. The increased focus on social media as a source for potential employees is also driven by the improvement in the hiring process. 73% companies found that they were able to successfully hire employees through social networks. More significantly, 42% companies claim that the candidate quality has improved due to social media hiring and nearly 20% companies found that it took them lesser time to hire through social networks. Here is the infographic, courtesy MediaBistro.com.

LinkedIn’s Financials
LinkedIn’s first quarter revenues grew 46% over the year to $473.2 million, ahead of the market’s expectations of $466.6 million. For the quarter, they reported a loss of $0.11 per share compared to earnings of $0.20 per share the previous year. The losses have been attributed to increased investments in product and international expansion. Adjusted EPS of $0.38 was ahead of the Street’s projections of $0.34.

By segment, revenues from Talent Solutions grew 50% to $275.9 million and revenues from Marketing Solutions grew 36% to $102 million. Revenues from Premium Subscriptions grew 46% to $96 million.

During the quarter, LinkedIn’s user base grew 36% over the year to 296 million. As of April this year, LinkedIn had crossed the milestone of 300 million members of which 100 million were in the US. comScore report pegs LinkedIn and SlideShare traffic at an average of 186 million monthly unique visitors during the quarter. Excluding SlideShare, LinkedIn averaged 142 million monthly unique visitors and delivered 11.5 billion page views for the March ended quarter.

Mobile has been a strong growth engine for LinkedIn which saw overall members triple over the year and account for 43% of their monthly unique visitors. LinkedIn expects the mobile user base to account for more than half of total traffic by the end of this year.

For the current quarter, LinkedIn projected revenues of $500 million-$505 million and an EBITDA of $118 million-$120 million, compared with the market’s projections of revenues of $505.5 million with an EBITDA of $120.34 million. LinkedIn raised the year’s projections to revenues of $2.06 billion-$2.08 billion with an EBITDA of $505 million-$510 million. The Street was projecting revenues of $2.11 billion and EBITDA of $514.37 million.

LinkedIn and Evernote Partnership
Recently, LinkedIn entered into an agreement with Evernote to reinvent the Rolodex. As part of the agreement, Evernote will digitize relevant LinkedIn information and give the user the option to add the contact information of their LinkedIn contacts to their address book. Additionally, the two companies will work together to add features such as the ability to add audio from a meeting, documents, and emails related to the contact list on the contact’s card’s page in Evernote. The feature has been released for iOS, Mac and Windows systems and the Android option is expected soon. The service comes with the ability to scan cards for free for everyone for the first year, after which users will be required to pay for Evernote’s premium subscription.

LinkedIn’s International Focus
As part of their international growth plans, LinkedIn has expanded their presence in China. The beta release of their Chinese website has seen strong results. The site has attracted over 5 million users since the site was launched in February this year. China’s censorship rules have led to other social media sites like Facebook and Twitter being kept outside the country. LinkedIn, thus, has a first mover advantage that they have leveraged through their partnership with Chinese chat application WeChat to help attract the more than 618 million Internet users in the country. LinkedIn estimates that their real target is the 140 million Chinese professionals and students in the country.

LinkedIn’s Publishing Strategy

The most interesting, however, is LinkedIn’s publishing strategy around Pulse. LinkedIn acquired Pulse last year for an estimated $90 million and they are now integrating the business to deliver a successful publishing platform that will help improve user engagement. LinkedIn Publishing will let users publish media rich content that can also be shared with other users. The service is being rolled out to to all members and will also become a strong tool for marketers. In fact, analysts are calling LinkedIn Publishing “A New Era of Social Influence.” I publish on LinkedIn regularly as an ‘Influencer’ and it is a strong content marketing platform for people interested in building a following to propagate their ideas. LinkedIn has attracted a strong roster of writers to this platform ranging from Richard Branson to Bill Gates and Jack welch. LinkedIn doesn’t have to pay any of the writers, and gets a strong body of user-generated content on a daily basis, creating an opportunity for ad-based monetization for the platform, as well as higher engagement from its users (both content producers and consumers). It is a brilliant strategy, and one that will dramatically expand in scope as the wider LinkedIn population starts to publish on it. Even if 0.1% of its 300 million membership publishes, that would be 300k writers. There will, inevitably, be good content that will emerge out of this population or writers, and bubble to the top.

Their stock is trading at $155.81 with a market capitalization of $18.97 billion. It touched a high of $257.56 in September last year. I continue to be a fan of LinkedIn as a company with very strong long-term prospects.

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