LinkedIn’s stock surges, setting the tone for social media

Posted by | 19 February, 2012 | Business models, Facebook

Original post by Roland Jones via TheBottomLine

Managers of LinkedIn celebrate as the company goes public in May, 2011.

Shares of professional-networking website LinkedIn surged Friday, jumping 18 percent, after the company reported quarterly sales that more than doubled and passed a major milestone, chalking up 150 million registered users worldwide.

Michael Graham, an Internet analyst at Canaccord Genuity, raised his earnings estimate for the company, writing in a research note that LinkedIn has taken “another step on the path toward becoming the default global hiring solution.”

The growth in users cements LinkedIn’s position as the largest professional network on the Internet. The company’s performance and outlook is keenly watched by investors as an indication of whether the business model of Internet companies is solid -- especially in light of Facebook’s filing for an IPO last week.

Facebook’s public offering looks set to be one of the largest and most talked about in recent memory and follows public offerings from other companies in the social media space, including Groupon, Pandora, Zynga and LinkedIn.

Started in the living room of ex-PayPal executive Reid Hoffman in 2002 and officially launched in May 2003, LinkedIn is similar to Facebook in that it connects people but it is much smaller and is geared towards professionals.

It makes money by selling premium subscriptions to its members and by helping companies with hiring and marketing. Its services are also used by professionals seeking jobs or contacts.

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