The question going forward for LinkedIn, though, is whether it can sustain its positive network effect to become the undisputed leader in the business social-media space. Monster Worldwide, Inc. (NYSE:MWW) used to have a much stronger presence in personnel-based online services, but LinkedIn has quickly eaten into its business. As its customers have gravitated toward using LinkedIn to an ever-greater extent, Monster has struggled with huge declines in sales and earnings, and the stock reflects investors’ lack of confidence in Monster’s future. Facebook has introduced a new jobs app that could eventually pose a threat, and a new service called Relationship Science could be the next challenge in the space. LinkedIn Corp (NYSE:LNKD) is on top of its game now, but it has to keep moving forward to sustain its advantage.
For LinkedIn to improve, it needs to keep pushing its premium subscriptions, which will be the biggest source of revenue growth for the foreseeable future. By making the most of that opportunity as well as expanding into corporate enterprise and relationship management, LinkedIn could grow into its valuation in the years to come.
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you’ll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.
The article Has LinkedIn Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Facebook and LinkedIn. The Motley Fool owns shares of Facebook and LinkedIn.
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