LinkedIn Corp (LNKD): Investors Should Pay Attention to User Growth from Earnings Release

LinkedIn Corp (NYSE:LNKD) will report its earnings for the second quarter on Thursday after the market closes. While the Street awaits the results, John Simons, AP. Technology and Media Editor, in an interview with Julia Boorstin, on CNBC, provided some expectations regarding the social media company’s upcoming results. Boorstin pointed out that investors have not been very fond of the LinkedIn so far this year, which is also supported by the 16% decline of the stock year-to-date. Even today, ahead of the results, the stock has been already 3% in red.

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Simons stated that the most important thing that LinkedIn Corp (NYSE:LNKD) should focus on is the user growth. The Street currently expects LinkedIn to show that it reached the 300 million users mark during the last quarter.

“[…] What they need to tell us from here is how the user growth is sustainable and how they are going to keep users coming back to the site more often,” Simons added.

Drawn on his own experience, Simons pointed out that people are not visiting LinkedIn Corp (NYSE:LNKD)’s website very often, which should be a major concern for the company. In his opinion, LinkedIn has to figure out a strategy to engage people in accessing the website more often and staying there.

“I think they are doing a lot right and even more recently than the quarter that they will talk about today. They’ve done some really interesting things in the last month. During July, they made two acquisitions, one was a company called ‘Newsle,’ which creates news content around business dealings, and another company that will help with marketing and help with people, make connections, facilitate sales and business deals,” Simons said.

These developments, according to Simons will help LinkedIn Corp (NYSE:LNKD) in its strategy to engage users. In addition, it is important to point out that two other major players on the social media market, Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) have posted results that significantly exceeded the expectations. Therefore, Simons mentioned that most analysts have optimistic expectations regarding LinkedIn as well, expecting the company to meet or even beat the forecasts.

Disclosure: none

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