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You Don’t Need a Thousand Reasons to Buy LinkedIn Corp (LNKD) – Just Two

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Jeff WeinerLinkedIn Corp (NYSE:LNKD) has arguably presented one of the most incredible rallies this year. Despite trading intimately close to its 52-week high of $207, it remains a good buy in view of the great upside potential. While bears retreat to their cave, citing a high PE ratio (which is typical of internet stocks) and alleged manipulations that have absurd conspiracy theorist roots, avid investors are realizing the golden opportunity in LinkedIn Corp (NYSE:LNKD). There are two solid reasons why you should add this stock to your portfolio and cash in on one of the greatest opportunities in the internet era.

Efficient, easy to understand model

“LinkedIn is nothing like Facebook Inc (NASDAQ:FB).” This is the message that LinkedIn CEO, Jeff Weiner, wants investors to know. On paper, there may be many parallels. But the reality remains that these two companies have fundamentally different models.

While LinkedIn Corp (NYSE:LNKD) can make money when you are logged out of your account, Facebook Inc (NASDAQ:FB) can’t. That is why irate Facebook loyalists went ballistic when renowned media mogul Rupert Murdoch took a stab at Facebook saying it would go The MySpace way based on reduced hours spent per member on the site.

How does LinkedIn Corp (NYSE:LNKD) make money from your account when you are not logged in? LinkedIn uses information that you have provided to furnish its flagship Recruiter product, allowing people who buy talent for a living to conveniently access a rich pool of varying talents. Because of this, every hour spent engaging by a single user on LinkedIn allows the company to bring in $1.30. In the same regard, Facebook Inc (NASDAQ:FB) only manages to earn around $0.06.

The flagship Recruiter product is the juice; it is the core of LinkedIn Corp (NYSE:LNKD). Not only is the model behind Recruiter easy to understand, but the product is likely to grow astronomically; especially considering the hastened pace at which entrepreneurship and personal branding is growing. Already, Recruiter has disrupted the traditional recruitment industry. While LinkedIn’s stock has gained more than 60% this year, traditional heavyweight Heidrick & Struggles has slumped close to 70% in the past half decade.

Lesser reliance on ads coupled with competitive advantage

LinkedIn Corp (NYSE:LNKD)’s flagship Recruiter product brings in close to 60% of the company’s revenue. The remaining 40% is brought in by ads and subscription services. This spread out product portfolio not only minimizes risks but also limits LinkedIn’s exposure to the risky digital ad business.

The digital ad business has been under major reforms in the past several years, and companies that previously ruled, like Yahoo! Inc. (NASDAQ:YHOO), have been compelled to go back to the drawing board.

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