LinkedIn Corp (LNKD): A SWOT Analysis

Page 1 of 2

LinkedIn Inc.LinkedIn Corp (NYSE:LNKD)’s stock is near all-time highs. The rapidly growing social media company has been one of the best performers among numerous other Internet companies that went public in recent years. The company is growing rapidly across the board and building its presence across the globe. A SWOT analysis is called for to examine the future possibilities of LinkedIn Corp (NYSE:LNKD)’s business.

Strengths

First Mover: LinkedIn Corp (NYSE:LNKD) has established itself as the dominant firm in the professional networking category by making the most out of its first-mover status. LinkedIn, along with competing social firms like Facebook Inc (NASDAQ:FB) and Twitter, have very strong positions in the broader social media category.

User Traffic: LinkedIn’s user base has been growing rapidly and now has more than 225 million members. LinkedIn has done very well in growing internationally, users outside the U.S. now make up 64% of cumulative users. And the company is increasingly becoming a bigger Internet platform over time. According to comScore, LinkedIn and Slideshare now have more than 170.4 million monthly unique visitors, and it ranks as the 22nd most visited web property in the world.

Revenue Model: LinkedIn Corp (NYSE:LNKD) has a solid business model with revenues flowing in from three different streams, including Premium subscriptions, Marketing solutions and Talent solutions. However, LinkedIn largely remains a recruitment portal with its hiring solutions business, which makes up more than half of the revenues for the company. And LinkedIn has been growing its revenues rapidly by taking away more recruitment dollars from competitors like Careerbuilder and Monster Worldwide, Inc. (NYSE:MWW). LinkedIn grew its top-line revenues by 72% Y/Y, and has been eating Monster Worldwide, Inc. (NYSE:MWW)’s lunch. In the last quarter, Monster’s revenues declined 9% Y/Y and its bottom-line decreased 24% on a Y/Y basis.

Corporate Clients & Add-Ons: LinkedIn has been adding corporate clients rapidly at double-digit rates consistently for a number of quarters. LinkedIn added more than 1,700 corporate customers in 1Q13, which brings the total number of corporate customers on LinkedIn to more than 18,000. Some of these clients spend a lot of money on LinkedIn’s services and have long-term contracts with the company, which translate into a steady stream of growing revenues.

Weaknesses

Mobile Strategy: LinkedIn Corp (NYSE:LNKD) now gets roughly 30% of its unique visitors from mobile apps, which is a pretty sizable increase from 19% a year ago. However, the company’s monetization of this increasingly large mobile user base hasn’t gained much traction. The company did make inroads to developing a more user-friendly presence with its acquisition of Pulse, which has already seen more than 30 million activations.

User Engagement: LinkedIn’s user engagement has accelerated in the last two quarters, but the company should take more measures to improve its user engagement levels. LinkedIn’s user engagement as measured by total page views on desktop has risen to 11.6 billion page views in a single quarter, partially driven by the increased number of users. The company’s ability to actively engage its user traffic through more initiatives like Influencers might drive more users to visit its platform regularly, relative to other social media sites.

Dependency on Online Recruitment: The company’s fortunes are heavily tied to the size and the growth of the online recruitment space. LinkedIn is heavily dependent on the revenues from its talent solutions business, which is increasingly being a bigger contributor for the company’s total sales. In Q1 2010, revenues from talent solutions made up only 38% of the company’s total revenues, which notched up to 57% in the 1Q13. As a result, LinkedIn is increasingly being viewed as a career solutions portal, and not a social media or networking platform.

Opportunities

Publishing and content platform: LinkedIn Corp (NYSE:LNKD) has done a commendable job of ramping up its platform as a publishing and content platform. The company’s initiatives towards building an Influencers platform have been very successful in driving business leaders and thought leaders to publish their opinions and share with millions of LinkedIn users. In addition, other LinkedIn assets like Slideshare and Pulse have paved the way for enabling the company to establish itself as a content publisher on the web. LinkedIn can ramp up its user engagement levels even more by building on the success of its Influencers division and coming up with more innovative initiatives.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!