The world of social media might be dominant in favor of Facebook Inc. (NASDAQ:FB), but in the world of investing in social media, the undisputed king at this point is LinkedIn Corporation (NYSE:LNKD), which continues to impress with its business model, its financials and its continuing diversity and monetization plans.
LinkedIn Corporation (NYSE:LNKD) continued its ascent in the realm of investing thanks to a strong quarterly earnings report Thursday, which has sent its stock on another upward swing, up more than 12 percent on the day to just shy of $105 a share. This has been quite a remakable expansion for LinkedIn, which has a model and a business that investors are clamping onto, mainly because they’re seeing consistent return on their money.
“LinkedIn is benefiting from secular growth, a very nicely diversified business model, and market share gains,” Citi analyst Mark Mahaney wrote today in a note to investors.
With Facebook Inc (NASDAQ:FB), on the other had, the stock has dropped nearly 50 percent from its IPO price just three months ago. There have been a number of factors and bad news that have come with Facebook since the company went public, and now many of the numbers Facebook reports are being questioned, criticized and scrutinized. Some of the recent bad karma for Facebook has been reports of nearly 9 percent of Facebook accounts are considered “fake,” yet the company includes those numbers in its total account number. (which means the actual number may be closer to 500 million than the 550 million reported). Also, there have been questions regarding Facebook’s definition of “active user,” which Facebook is accused of a more liberal definition than just those people who use Facebook.com – instead adding those who use account credentials to log in to another external web site.
Plus, Facebook Inc (NASDAQ:FB) has admitted to having a difficult time monetizing its ubiquitousness in terms of advertising, and has especially found trouble with Facebook Mobile, which CEO Mark Zuckerberg predicted the mobile market will be bigger than the computer market within five years. With Facebook having limited success on computers now, and the need for better mobil reach in the near future, Facebook will need to show some progress and intent to make money for investors fairly soon, or many investors will see Facebook as a glorified non-profit.
LinkedIn Corporation (NYSE:LNKD) has been making stock moves similar to the early days of Google Inc. (NASDAQ:GOOG) when it made its splash in the technology arena with the introduction of its search engine and Internet advertising. LinkedIn has a strong monetization mechanism with not only advertising, but also with fees for memberships and other services.
Facebook will need to work hard to find returns on investment for investors like billionaire Chase Coleman, who is invested in Facebook Inc (NASDAQ:FB) stock (see his stock picks from the first quarter, before Facebook’s IPO; his new quarterly list will be released in the middle of August). Meanwhile, LinkedIn is making some money for a billionaire like Stuart Peterson, who invested about 4 percent of his portfolio in LinkedIn during the first quarter of this year (see his holdings here).