Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Facebook Inc (FB) or LinkedIn Corp (LNKD)?

Page 1 of 2

Facebook Inc (NASDAQ:FB) and LinkedIn Corp (NYSE:LNKD) are among the most innovative companies of our time, and they both provide interesting opportunities for investors to profit from the social networks boom over the next years. However, their business models are quite different, and this has material implications to consider.

Facebook Inc (NASDAQ:FB)

Online recruiting
The big cash generator for LinkedIn Corp (NYSE:LNKD) is talent solutions for employers, which provided 56% of revenue in the last quarter, another 20% of sales came from premium subscriptions and the remaining 23% was produced by advertising.

LinkedIn Corp (NYSE:LNKD) estimates that its addressable market is worth around $27 billion, and it’s an industry in which the company has positioned itself as the disruptive leader. With more than 238 million members and 20,200 companies using its services, LinkedIn has already achieved critical mass, and the company is benefiting from the self-sustainable competitive advantage provided by the network effect.

Users need to be on LinkedIn Corp (NYSE:LNKD) because professional contacts, potential business partners, and job recruiters are using the platform. Hiring companies want to go where all the good candidates are, especially in the case of LinkedIn Corp (NYSE:LNKD), the place where they can even contact people who didn’t necessarily apply for a specific job.

The bigger LinkedIn Corp (NYSE:LNKD) gets, the more valuable the service becomes for both hiring companies and professionals, and this at the same time attracts more users from both sides. A growing platform means that LinkedIn should retain considerable pricing power over time as its services become more valuable.

The service is about much more than online resumes. LinkedIn allows people to build a full blown professional identity online, including the social and professional interactions that come with that. This means that users are unlikely to walk away from LinkedIn anytime soon as they have much invested in the professional network.

The company has delivered earnings results above analyst’s expectations in each of the last four quarters. Past performance is no guarantee about the future, but especially when investing in innovative online companies; it’s comforting to know that management has the ability to deliver financial results.

Online advertising
Facebook Inc (NASDAQ:FB) makes most of its money from online advertising, where the company competes against search engines like industry giant Google Inc (NASDAQ:GOOG) and the reinvigorated Yahoo! Inc. (NASDAQ:YHOOwhich has been attracting new talent and revitalizing its products under the leadership of Marissa Mayer.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!